9/17/2010
EU says FTA with South Korea will profit European businesses
BRUSSELS, The European Union-South Korea Free Trade Agreement (FTA) which was approved by the EU Council yesterday (Thursday) is the most ambitious trade agreement ever negotiated by the EU, stated the European Commission here Friday.
The EU's executive branch noted in a statement that the FTA is expected to double EU trade with Korea in medium term and to hence boost jobs and growth.
"The FTA with Korea is the EU's first deal with an Asian partner. It is a signal that the EU is open for business," said the statement.
The FTA will relieve EU exporters of industrial and agricultural goods to Korea from tariffs. They will save 1.6 billion euro on duties annually, out of which 850 million euro already at the day of entry into force of the agreement.
On their part, Korean exporters will save 1.1 billion euro.
The FTA will create substantial new trade in goods and services of 19.1 billion euro for the EU compared to 12.8 billion euro for Korea.
The 8% tariff on EU cars exported to Korea will be removed, which means that for every car worth 25,000 euro exported to Korea, 2,000 euro in duties would be saved.
The FTA will open several billions worth of new opportunities for EU companies in the services sectors.
The FTA would would allow EU satellite broadcasters (telephone and TV) to operate directly cross-border into Korea, thus avoiding the obligation to liaise with a Korean operator.
It will allow 100% indirect ownership in the Korean telecommunication sector, thus ensuring easier operation for EU companies and secure full market access for EU's shipping firms and the right of establishment in Korea, as well as non-discriminatory treatment in the use of port services and infrastructure.
The European Commission expects to sign the FTA with its Korean partners at the EU-Korea Summit on 6 October in Brussels.
The provisional application of the FTA will begin on 1 July 2011, provided that the European Parliament has given its consent.
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