EU aims for SKorea FTA by 2010

• Source: Global Times
• [23:46 July 13 2009]
• Comments

The European Union could finalize a free-trade agreement (FTA) with South Korea before the end of the year, Swedish Prime Minister Fredrik Reinfeldt said yesterday.

“Korea is an important partner for the EU ... I hope that this EU-Korean agreement can be concluded during the Swedish presidency,” Reinfeldt said during a joint press conference with South Korean President Lee Myung-Bak in Stockholm.

Reinfeldt, whose country holds the EU’s rotating presidency until December 31, told reporters that the proposed agreement would “send strong signals against the use of protectionism” throughout Europe and the rest of the world.

President Lee said the FTA “will bring new opportunities to the economies of the EU and (South) Korea.”

EU member states have given broad backing to the FTA but are still to fully endorse it, diplomats in Brussels said.

“There was broad support, yes,” an EU diplomat said. “But some member states asked for more time.”

The two sides in March reached a deal on most points but follow-up talks have failed to settle two outstanding issues - duty drawback and rules of origin.

South Korea wants permission to refund import tariffs for manufacturers who use imported materials to make products for export. Brussels says this would give Korean firms an unfair advantage.

On rules of origin, South Korea wants items made at a Seoul-funded industrial complex in North Korea to be treated as South Korean goods.

Also, since South Korean manufacturers import many parts from China and elsewhere, the two sides are trying to agree what percentage of a finished item must be made in South Korea.

The European bloc was South Korea’s second-largest trading partner last year after China, with two-way trade worth more than $90 billion.

The EU is the largest foreign investor in South Korea, with outstanding investment reaching $43.4 billion at the end of 2007.

A deal with Europe would be a relief for Seoul after its free trade pact with the United States faltered.

AFP