Brussels, 01/07/2016 (Agence Europe) - Bilateral trade in goods between the EU and South Korea has continued to rise since the free trade agreement between the two partners entered into force on 1 July 2011. In 2015 this bilateral trade reached a record level of over €90 million, according to a European Commission report published on Friday 1 July.
EU exports to South Korea have increased by 55% in five years, helping transform the EU's trade deficit to a trade surplus. South Korea has become the EU's ninth largest export market. Furthermore, EU companies have saved €2.8 billion thanks to the removal of or reduction in customs duties, the Commission report states.
As well as the more traditional exports of machinery, transport equipment and chemicals, the agreement has opened up new export perspectives for many European SMEs in sectors as varied as food and drinks, pottery, packaging, sports equipment and book-binding technology, the Commission states.
EU goods exports that were previously subject to particularly high tariffs (especially for some agricultural products) now benefit from reduced duties and have increased by over 70%. Some sectors have seen an even stronger progression - such as automobiles, with the sale of cars from the EU tripling in South Korea in five years.
In addition, EU companies have succeeded in increasing the value of their services to South Korea by 11% and in expanding bilateral investment by 35%.
The Commission continues to monitor how the situation is developing in sectors that are potentially sensitive (textiles, automobiles and electronic products) and, together with civil society, it pays particular attention to the effect of trade on sustainable development. As part of this, the EU and South Korea also cooperate on environmental issues and labour rights, the report adds.
The Commission states that the agreement enables EU authorities to continue improving trading conditions for European companies by raising potential problems in several implementing committees that have been created as part of this free trade agreement. The EU and South Korea have agreed to study the possibility of amending the existing agreement in order to respond even better to stakeholders' expectations on both sides - for example, so that European companies can export through their logistical hubs in Asia and at the same time benefit from the free trade agreement.
The only fly in the ointment is that over 35% of EU companies exporting to South Korea fail to ask for the privileged treatment (lower customs duties and other benefits) to which they are entitled, the Commission points out, calling on EU member states to inform their companies about the benefits of the agreement.
The EU-South Korea free trade agreement has led to important changes - such as the elimination by both sides of import duties on the large majority of products traded between the two partners, as well as a reduction in administrative barriers to trade, and mutual openness as regards provision of services, public contracts and investment. The agreement also includes guarantees as regards competition policy, the transparency of regulatory regimes, and the protection of intellectual property rights, the Commission states.
“The numbers speak for themselves. The evidence of our agreement with Korea should help convince the unconvinced that Europe benefits greatly from more free trade. When our companies can export more easily, or when money saved from scrapped customs duties can be reinvested in company development, it spurs European growth. It safeguards and creates jobs. This anniversary gives us many reasons to roll up our sleeves and conclude all other pending EU deals that are on the table”, said European Commissioner for Trade Cecilia Malmström.
The annual report on the implementation of the EU-South Korea free trade agreement can be consulted at: http://goo.gl/ytX6FD . (Original version in French by Emmanuel Hagry)