EU, South Korea Sign Free Trade Deal
11 October 2010 EU trade commissioner Karel De Gucht, the Belgian minister of foreign affairs Steven Vanackere representing the presidency of the council of the EU, and the Korean minister for trade Kim Jong-hoon have signed a Free Trade Agreement (FTA) between the EU and South Korea. This FTA is the most ambitious trade agreement ever negotiated by the EU and the first with an Asian country. The signature signals a significant step on the road to its implementation and is one of the main events of the EU-Korea Summit taking place in Brussels.
“The agreement between the EU and South Korea marks a significant achievement in improving our trade links,” says Commissioner De Gucht. “It will provide a real boost to jobs and growth in Europe at this critical time. This wide-ranging and innovative deal is a benchmark for what we want to achieve in other trade agreements. Tackling the more difficult nontariff barriers to international commerce can cut the costs of doing business as much if not more than getting rid of import duties.”
The text of the FTA was initialled between the European Commission and South Korea on 15 October 2009. Since then the text of the Agreement was translated into Korean and 21 EU languages. All EU Member States have signed the FTA ahead of today’s official signing ceremony.
The date of provisional application will be 1 July 2011, provided that the European Parliament has given its consent to the FTA and the Regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU-South Korea FTA is in place. The EU Member States will have to also ratify the agreement according to their own laws and procedures.
One study estimates that the deal will create new trade in good and services worth €19.1 billion for the EU; another study calculates that it will more than double the bilateral EU-South Korea trade in the next 20 years compared to a scenario without the FTA. The agreement will remove virtually all import duties between the two economies as well as many non-tariff barriers. It will relieve EU exporters of industrial and agricultural goods to South Korea from paying tariffs. Once the duties are fully eliminated, EU exporters will save € 1.6 billion annually. Half of these savings will be applicable already on the day of the entry into force of the Agreement.
The FTA will also create new market access in services and investment and will make major advances in areas such as intellectual property, procurement, competition policy and trade and sustainable development.
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