EU exports to South Korea increase by 55% after bilateral trade deal
EU exports to South Korea have increased by 55%, and European companies have saved €2.8 billion (US$3.2 billion) in scrapped or discounted customs duties, since the European Union struck a free trade agreement (FTA) with South Korea five years ago.
Today, South Korea is one of the EU’s top ten export markets.
Bilateral trade in goods between the EU and South Korea has been growing constantly since 2011, and reached a record level of over €90 billion (US$100.2 billion) in 2015, according to a report released by the European Commission on 1 July to mark the five-year anniversary of the trade deal with South Korea.
Exports of EU products that previously faced particularly high duty rates – such as certain agricultural products – now benefit from discounted tariffs, and their exports have increased by over 70%.
In addition to the more traditional exports of machinery, transport equipment, and chemical products, the agreement has opened new export opportunities for many small European businesses in sectors including food and drink, pottery, packaging, sports equipment and bookbinding technology.
Other sectors which experienced a boost include the car and services industry – the EU’s car sales in South Korea tripled over the five-year period; and EU companies added 11% to the value of services provided in South Korea and expanded bilateral investments by 35%.
EU commissioner for trade Cecilia Malmström said: “The numbers speak for themselves.
“The evidence of our agreement with Korea should help convince the unconvinced that Europe benefits greatly from more free trade.
“When our companies can export more easily, or when money saved from scrapped customs duties can be reinvested in company development, it spurs European growth.
“It safeguards and creates jobs.
“This anniversary gives us many reasons to roll up our sleeves and conclude all other pending EU trade deals that are on the table.”
The trade deal, which has been in place since July 2011, is the first comprehensive agreement concluded by the EU with an Asian partner, and the most ambitious trade deal implemented by the EU so far.
Under the EU-Korea FTA, tariffs on EU imports of industrial, fishery and agricultural products to Korea have been substantially reduced or eliminated completely.
The deal also contains a number of general commitments on technical barriers to trade, including cooperation on standards and regulatory issues, transparency and marking/labelling, that go beyond existing obligations contained in the WTO Agreement on Technical Barriers to Trade.
These commitments apply to four areas: consumer electronics; motor vehicles and parts; pharmaceutical products/medical devices; and chemicals.
The FTA also covers the area of intellectual property rights by giving a legal framework to basic rules in the EU and in Korea for the protection of intellectual property rights and enforcement of such protection.
The FTA established mechanisms for exchange and cooperation; set standards of protection for intellectual property rights such as the protection of authors’ work for a duration of 70 years after the death of the author and the right to a single equitable remuneration for performers and producers of phonograms.
Since the South Korea agreement, the EU has negotiated several other agreements that are already in effect, including with Colombia and Peru, Central American countries, and Ukraine.
Agreements with Georgia and Moldova – two comprehensive deals, part of larger Association Agreements – formally entered into force on 1 July after having been ratified by all EU member states.
The EU is also set to benefit from other agreements still to be validated, including a comprehensive trade deal with Canada, as well as agreements with Singapore and Vietnam.
The EU’s new trade policy strategy presented in the autumn of 2015 – Trade for All -includes plans to conclude future trade deals with strategic EU partners to support further economic growth in Europe.
Click here to access the EU’s full guide to the South Korea FTA
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About Winnie Agbonlahor
Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.
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