What to expect from the EU FTA (with South Korea)

[pampango]

Source: JoongAng Daily

"Negotiations between Korea and the European Union, the world s largest market, have concluded. After reaching a free trade deal with the United States in of May last year, our country has become the one and only nation to have bilateral trade deals with the two largest economic entities in the world. Last year, our trade volume with the 27 countries of the EU was $98.4 billion. The figure is larger than our trade with Japan, $89.2 billion, or that with the United States, $84.7 billion. In terms of trade surplus, the EU is our best trading partner.

Once the free trade deal with the EU is implemented, 96 percent of our tariffs and 99 percent of those in Europe will be lifted immediately or within three years. The evaluations of the deal vary. However, few disagree that the auto industry will benefit most from the pact. Both sides must abolish all the existing tariffs on cars larger than 1,500 cc within three years, and compact-sized cars less than that within five years.

The EU has 10 percent import duties, 2 percent higher than Korea s. That means once duties and tariffs are lifted, Korean companies will benefit more than European ones as products of the former will be lowered by a larger margin. Some maintain that as a great deal of Korean cars sold in Europe are produced overseas the free trade agreement with the EU will not be so huge. But as Korean automakers will be able to save money for other costs including advertisement and promotion, if not for production itself, they will certainly have better conditions for their businesses."

Read more: http://joongangdaily.joins.com/article/view.asp?aid=2907395

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The EU's free trade agreement with South Korea has to be ratified by both sides, so it is not official yet. I didn't realize that the EU has free trade agreements with India (that's a big one), Mexico, Chile, Jordan, Lebanon (effective 2014), South Africa, and is negotiating FTA's with Mercosur, APEC, and a number of individual countries.