European Union-Korea Free Trade Agreement
Encyclopedia
The European Union – South Korea Free Trade Agreement is a free trade agreement between the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 (EU) and South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

. The agreement was signed on 15 October 2009. The agreement has been provisionally in force since 1 July 2011 while the final ratification is taking place.

The agreement would be the second largest free trade agreement, second only to the North American Free Trade Agreement
North American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...

. It is also the most comprehensive the EU has ever negotiated: import duties are near eliminated on all produce and there is deep liberalisation in trade in services. It includes provisions for intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

 (including geographical indications
Protected Geographical Status
Protected Geographical Status is a legal framework defined in European Union law to protect the names of regional foods. Protected Designation of Origin , Protected Geographical Indication and Traditional Speciality Guaranteed are distinct regimes of geographical indications within the framework...

), public procurement, competition, transparency of regulation and sustainable development. There are also specific commitments against non-tariff obstacles on sectors such as automobiles, pharmaceuticals and electronics.

Background

This is the third trade related agreement that South Korea and the European Union have signed between themselves. The first, the Agreement on Co-operation and Mutual Administrative Assistance in Customs Matters was signed on 13 May 1997. This agreement allows the sharing of competition policy between the two parties. The second agreement, the Framework Agreement on Trade and Co-operation, was enacted on 1 April 2001. The framework attempts to increase co-operation on several industries, including transport, energy, science and technology, industry, environment and culture.

Trade between the two parties was €64 billion in 2007. The EU is the second largest importer of South Korean goods. South Korea is the eight largest importer of EU goods. According to some studies, an agreement can increase trade as much as 40% over the long term.

Negotiations and opposition

Negotiations started in May 2007 and were expected to be completed in March 2009; however, several issues had to be resolved before the agreement could be finished. Seven rounds of negotiations over various aspects of the agreements were completed which addressed problems over several issues including rules of origin
Rules of origin
Rules of origin are used to determine the country of origin of a product for purposes of international trade. There are two common types of rules of origin depending upon application, the preferential and non-preferential rules of origin...

, auto trade issues, and allowing certain tariff reductions.

European automakers believe this agreement would significantly harm them by allowing South Korean automakers to compete against them in the EU. Adolfo Urso, a junior Italian minister for external trade, said that Italian government may veto the agreement based on the European automakers concerns. All 27 countries that make up the EU along with the EU Parliament, must approve the agreement before implementation. South Korea has had significant opposition to previous free trade agreements most especially with the United States. This EU agreement is larger than the United States agreement. However, Hur Kyung-wook, Vice Finance Minister for South Korea, has said that he believes the agreement will go into effect in July 2010. On March 22, 2011, the citizen group called Lawyers for Democratic Society (민주사회를 위한 변호사모임) announced that there were 160 cases of mistranslated errors in the Korean version of the document.

See also

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