EU-KOREA FREE TRADE NEGOTIATIONS '70 PERCENT COMPLETE'

The EU and South Korea announced that they made great strides during free trade agreement (FTA) negotiations last week, agreeing to provisions on anti-dumping, dispute settlement, intellectual property and subsidies.

The week-long discussions, marking the sixth round of meetings between the two, ended on 1 February.

The bilateral FTA talks began in May 2007. Though initially expected to conclude by the end of that year, the discussions hit snags on a couple of key provisions, including automobile trade, tariffs, and rules of origin. One sticking point was the EU's demand for the same concessions on auto trade that Seoul granted the US in a separate bilateral deal signed last year.

Prior to this week's talks, both sides agreed to shelve the contentious issues until the rest of the agreement was hammered out.

Now, while EU Chief Negotiator Ignacio Garcio Bercero says that the talks are '70 percent complete', the remaining agreements will be the most difficult to negotiate.
Nevertheless, South Korea's chief negotiator, Kim Han-Soo, was positive about the progress, saying "both sides approached the talks seriously with a willingness to get something done … [and] we've begun to produce results."

Currently, the agreement calls for the EU to eliminate all tariffs on South Korean goods within seven years, with 80 percent of goods tariffs phased out within three years. South Korea has agreed to remove tariffs on 68 percent of all EU goods, measured by value, in 3 years. Also, negotiators came to agreements on sustainable development, services, and establishment rights for foreign investors.

The next round of negotiations should take place in April. Garcio Bercero said that it would take "political efforts from both sides" in order to complete the negotiations on the contentious protections.

The EU considers Korea's strict domestic auto standards unacceptable, and hopes that Seoul will agree to abide by international standards.

Conversely, Korean manufacturers, who outsource many production capacities, want Brussels to relax its origin requirements, which call for 60 percent of a finished item to be produced in Korea in order to enter the EU under the FTA.

The EU and South Korea are major trade partners, with two-way trade valued at $80 billion in 2006. An eventual agreement could stand to boost that number by 50 percent.

ICTSD Reporting; "EU reports progress on trade deal with S Korea" FINANCIAL TIMES, 1 February 2008; "EU negotiator sees progress in free trade talks with South Korea" ASSOCIATED PRESS, 1 February 2008; "EU says "enormous" progress made in trade talks with S Korea" AGENCE FRANCE PRESSE, 1 February 2008.