South Korea Expects To Sign EU FTA Early Next Year

by Mary Swire, Tax-News.com, Hing Kong

09 December 2009

Lee Hye-min, South Korea's Deputy Minister for Trade, has told a forum in Seoul that it can be expected that the South Korea-European Union (EU) free trade agreement (FTA) will be signed in the first quarter of 2010.

South Korea and the EU initialled the final version of the FTA on October 15. It will remove virtually all tariffs between the two economies, as well as many non-tariff barriers, and will create new market access in services and investment.

The deal also makes major advances in areas such as intellectual property, procurement, competition policy and trade and sustainable development.

South Korea and the EU have now agreed to make efforts so that the agreement will be signed in the first quarter of next year, following which it would need to be approved by South Korea's parliament and the EU's 27 member states, before becoming effective.

Lee Hye-min confirmed that entry into force of the FTA could be expected in 2010, due to the application mechanism within its text, which should avoid any long delays in the approval processes.

The EU was South Korea's second-biggest trading partner after China, and its largest foreign investor, in 2008. The value of all goods traded between the EU and South Korea was about EUR65bn (USD95bn) in 2008.

As a result of the FTA, it has been forecast that South Korean exports will increase by USD11bn, and EU exports by USD28bn. The South Korean government itself has predicted that the FTA will increase bilateral trade by some 20%.

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