Europe eager for trade pact with Korea
Korea Times | 18 August 2006
Europe Eager for Trade Pact With Korea
By Jan Jettel
Staff Reporter
The European Union is showing eagerness to establish a free trade agreement (FTA) with Korea ahead of the resumption of talks next month, officials of both sides say.
Antti Niemela, director of the financial services committee of the European Chamber of Commerce in Korea (EUCCK), confirmed Europe’s strong interest in the bilateral trade pact with Korea.
"The industrial structures of Korea and the EU are complementary so that effects of welfare improvement would be substantial, " Niemela said.
Europe is the second largest export market for Korea, and EU companies are the biggest foreign direct investors in Korea. A study shows that with bilateral trade volume reaching 53 billion euros in 2005, an FTA could boost Korea’s gross domestic product (GDP) by up to 2 percent.
The Korean government is interested in an FTA with the EU to use it as leverage in the ongoing FTA negotiations with the United States. Many Koreans feel the U.S. is putting too many demands on Korea.
A high ranking European diplomat in Seoul said, “From a purely egoistical point of view, these bilateral FTAs make sense for America because in one on one negotiations the U.S. can much more easily flex its muscles and basically dictate to the other party the terms of trade.”
"And frankly, because of that, I do not understand why Korea even entered FTA negotiations with the U.S.,’’ he added.
However, the EU insists that certain non-tariff trade barriers for European companies be dropped before an FTA with Korea can be signed. According to the EUCCK, these barriers include emission and noise regulations for import cars and the quality testing process of imported pharmaceuticals.
Niemela said, “The Korean public will be more supportive of an FTA with the EU, unlike the U.S. The relationship between Korea and the EU has been very cordial and there has been no public resentment.”
Meanwhile, the Korean delegation’s upcoming Brussels visit will mark the second in as many months. Last month, Seoul sent a team to prepare for trade talks.
U.S. businesspeople in Korea remain, meanwhile, nonchalant with these developments.
The American Chamber of Commerce (AMCHAM) said it recognizes Korea’s right to engage in trade talks with other countries. "Since the WTO is struggling, the trend will be more FTAs; and every FTA Korea does will open the market more and help Korean’s enhance their global competitiveness and that will benefit all firms doing business in Korea," said Tamy Overby, president of the American business lobby.
