Seoul/ South Korea, 12 October 2011 - EU Trade Commissioner Karel De Gucht today welcomed the positive steps agreed between the European Union and South Korea to tackle outstanding issues after the recent implementation of their groundbreaking free trade deal.
In the first meeting of the EU-South Korea Trade Committee, co-chaired between South Korea’s Trade Minister Kim Jong-hoon and the EU Trade Commissioner Karel De Gucht, both sides took stock of the success of the deal for business after the first one hundred days. Furthermore, the co-chairs agreed to intensify efforts to do away with any remaining obstacles and to prevent future obstacles from emerging.
“I’m delighted that the first meeting of the EU-South Korea Trade Committee has proven so valuable at clearing up a number of outstanding issues thanks to the commitment and pragmatism of both sides. The first few months were always expected to be a test for such an innovative and far reaching trade agreement which is why I’m so pleased to see that it has passed with flying colours.”, stated EU Trade Commissioner Karel De Gucht.
For example, both parties agreed on ways forward to bridge outstanding implementation issues in the areas of motor vehicles and electronics. On motor vehicles, both sides tackled market access issues on tyres and after-sale verification rules for diesel emissions and safety standards of cars. On electronic goods, the meeting addressed the need to recognise agreed ways of testing electronic products.
On 1 July 2011 the EU-South Korea FTA became operational. First reductions of tariffs took effect. Within 5 years from the application of the FTA, 98.7% of duties in bilateral trade value for both industrial and agricultural products will be eliminated.
By the end of the transitional periods, duties on almost all products will disappear. Only trade in several agricultural products (e.g. garlic) will not be liberalised. This is the most ambitious trade liberalisation ever achieved in a FTA negotiated by the EU.
On 27 October 2011 the Commission will be hosting a high-level conference on the implementation of the EU-South Korea FTA in Brussels, which is part of the broader effort to promote this Agreement. The aim of the seminar is to raise awareness among the economic operators of the benefits of this FTA.
EU-South Korea goods trade exceeded €66.6 billion in 2010. The EU currently runs a deficit with South Korea in goods trade. However, the trends suggest that due to the significant growth potential of the Korean market and due to the entry into force of the EU-South Korea FTA this deficit will be decreasing. For products like chemicals, pharmaceuticals, auto parts, industrial machinery, shoes, medical equipment, non-ferrous metals, iron and steel, leather and fur, wood, ceramics and glass, the EU enjoys a solid trade surplus. Similarly, for agricultural products South Korea is one of the more valuable export markets globally for EU farmers, with annual sales of over €1 billion. On services, in 2009 the EU had a surplus with South Korea of €2.1 billion, with exports of €6 billion and imports of €3.9 billion. EU is also the biggest investor in South Korea in cumulative terms with 28.9 billion worth of investment stock in 2009.