Brussels, 16/07/2007 (Agence Europe) - The second round of talks between the EU and South Korea on a bilateral free trade agreement (FTA) began in Brussels on Monday, and will last until the end of the week. Negotiations were officially launched in Seoul in May (see EUROPE 9427).
In its initial offer, recently submitted to Seoul, the Commission suggests full liberalisation of trade within seven years. It proposes to remove its customs duties on manufactured products totally if South Korea makes a similar offer. Indeed, in return, the EU would expect improved market access in sectors where South Korea is expanding rapidly, such as motor cars, manufactured products and services. The EU also wants Seoul to lift its restrictions on European investment, an area where there is no “WTO discipline”. The EU also wants to prioritise the reduction and withdrawal of non-tariff and regulatory barriers.
With this still relatively protected partner, the EU is, then, putting forward only offensive interests and no defensive interests. For example, South Korea imposes an average customs duty of 11.2% on imports compared with 4.2% by the EU. South Korea is the Union's 4th largest non-European trading partner, while the EU is South Korea's second largest export market. EU-South Korea trade was worth €61 billion last year. The EU is the largest investor in South Korea, with, in 2006, a 45% share of direct foreign investment (DFI), worth $5 billion. According to Commission feasibility studies, an EU-South Korea FTA would generate trade growth of 30-40% between the parties.
The 3rd round of talks will take place in September. (eh)