EU-Korea FTA's First Year Has Seen Marked Progress, EC Official Says
The first year of the EU-Republic of Korea Free Trade Agreement (FTA) has moved the economic relationship of the trading partners “in the right direction,” Trade Commissioner Karel De Gucht said at an Oct. 16 European Parliament workshop in Brussels. The pact is “far-reaching in its elimination of tariffs,” and four years from now, about 99 percent of EU trade will be duty-free, he said. The FTA addresses barriers to trade in services, giving Europe new access for exports of telecommunications, shipping, finance, legal and environmental services, he said. It also addresses investment barriers and regulatory roadblocks, particularly in key sectors such as automobiles, pharmaceuticals and electronics, he said.
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The FTA includes provisions to boost intellectual property rights protections as well, he said. It has also opened market access in government procurement, he said. In gauging how the agreement has worked so far, several factors must be considered, he said. Some of the tariff cuts haven't taken place yet, and many companies aren't yet aware of the new opportunities the FTA offers, he said. In some areas, statistics lag behind reality, and any assessment must also take into account the financial crisis in world trade, he said. So any pronouncements on trade figures with South Korea are tentative, he said. Nevertheless, De Gucht said, he's pleased with the results so far. Where trade barriers have been removed or reduced, European exports are significantly up. Where tariffs have been completely removed, exports are up 54 percent compared with the average figures for the previous four years, he said. Machinery and textile exports are up 25 percent, animals and animal products 84 percent, he said. Europe now expects South Korea to make concrete progress on several fronts, including regulatory barriers in the automotive, food and pharmaceutical sectors, and questions surrounding some specific customs rules, he said. The broad conclusion to draw from the FTA is that “Europe has nothing to fear from trade,” De Gucht said. European companies are highly competitive on international markets, and the EU has maintained its 20-percent share of global exports as the U.S. and Japan have seen theirs shrink, he said.