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Source: www.asiaecon.org |


After two years of negotiation, South Korea and European Union (EU) are completing a trade agreement conversation. The talks started in May 2007, with auto and other industrial tariffs initially hampering progress. The provisional agreement said that the two sides reached a tentative agreement on eliminating or phasing out tariffs on 96 percent of EU goods and 99 percent of South Korea's goods within three years.

They are  leaving only its ratification in their respective legislatures and formal signing in September, a South Korean official said, Yonhap reported. The official also said South Korean President Lee Myung Bak and Swedish Prime Minister Fredrik Reinfeldt, who represents the European Union as Sweden currently hold the rotating EU presidency, will jointly announce the agreement.

They have also agreed to abolish tariffs on all industrial goods within five years after the pact takes effect, together with agreeing to eliminate tariffs on cars within three years to five years.

Korea and the 27-nation bloc agreed earlier that the trade deal is essential to upgrading bilateral relations to a strategic partnership, but the economic bloc failed to narrow differences among its members.

“Korea and the EU share the view that an early conclusion of the FTA and upgrading the Framework Agreement for Trade and Cooperation, signed between the two sides in 1996, are crucial to move their relations forward,’’ spokeswoman Kim said.

South Korea and the EU did US$79.4 billion in two-way trade in 2006, putting the EU on equal footing with the U.S. as the nation’s largest trading partner after China. The EU is the biggest foreign investor in South Korea, with $5 billion in 2005 alone.

If an agreement is made, it will be translated into 23 different languages and distributed to EU member states for review. If approved and ratified, the deal will fully open trade borders between Korea and its second largest trading partner.

Seoul’s chief negotiator said Monday that negotiations between South Korea and the European Union aimed at forging a free trade agreement (FTA) were going well.

“I think we have held very constructive and efficient talks to move forward the negotiations,” Deputy Trade Minister Kim Han-soo told reporters, ending the first day of talks. “The pace of negotiations is faster than I originally expected.” Earlier in the day, South Korea and the EU began their first round of talks that will end on Friday, hoping to tear down trade barriers and boost bilateral trade already worth about US$80 billion.

“The objective of the first round is to set parameters for an agreement and find common ground on sensitive issues,” Kim said.
“Our aim is to put all contentious issues on the negotiating table during the second round.” The ambitious negotiations aim to seal what would be another major economic partnership since South Korea has reached a landmark FTA with the United States early last month.

No deadline is set for a deal with the EU but South Korean officials hope to wrap it up within a year. The second and third rounds of the talks are scheduled for July and September in Brussels. No time frame has been set for the fourth round due to be held in South Korea.

“Working-group meetings are under way…but we didn’t start discussions into specifics,” the EU’s chief negotiator Ignacio Garcia Bercero, director of bilateral trade relations at the European Commission told reporters before Kim’s press briefing.

The EU requested South Korea ease safety regulations on automobiles and intensify efforts to crack down on fake goods, which the negotiators said hurt sales of European luxury brands such as Louis Vuitton and Rolex in South Korea, said the ministry official, who refused to give his name, citing the sensitivity of the talks.

In return, South Korea demanded the EU phase out tariffs on automobiles, flat panel televisions and other industrial goods at an early date and soften its environmental regulations, the official said.

South Korean officials expect that the negotiations with the EU will not be as difficult as the tedious 10-month give-and-take with the U.S., which often sparked violent protests.

South Korean officials anticipate tough negotiations with the EU, with the 27-member economic bloc expected to target South Korea’s service sector. South Korea, for its part, will try to seek greater access to the EU’s auto market and change anti-dumping policies, they said.

Agriculture is unlikely to pose a big problem, as both sides are expected to drop some sensitive items such as rice and beef from the proposed deal, Kim said. Other contentious issues such as access to the broadcasting and movie markets are also unlikely to be put on the negotiating table, he added.

Source: www.asiaecon.org |

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