S. Korea seeks breakthrough in free trade talks with EU
The Hankyoreh | 20 November 2007
S. Korea seeks breakthrough in free trade talks with EU
BRUSSELS, Nov. 19 (Yonhap)
South Korea’s chief negotiator in free trade talks with the European Union (EU) said on Monday that Seoul will redouble its efforts to make a breakthrough on some sticky issues, including a dispute over auto trade, and called for an "equal" effort from Brussels.
After reaching a trade accord with the United States earlier this year, Seoul has held four rounds of negotiations with Brussels on a free trade agreement that could provide Asia’s third-largest economy with a commercial bridge to Europe. However, the negotiations hit snags over auto trade and auto-related technical regulations as both sides remained reluctant to accept each other’s demand. The fifth round of negotiations, scheduled to end on Friday, kicked off here earlier in the day.
"This round is very crucial for the negotiations ... we had revised our offer as part of efforts to make headway in the negotiations. The EU should make a new proposal to match our efforts," Kim Han-soo, Seoul’s chief negotiator for the talks, said after ending first day of the five-day negotiations that run through Friday.
The 27-nation economic bloc is demanding that South Korea cut tariffs on cars and other products to the same extent that it did for the trade deal with the U.S.
Since the first round started in May, the EU has offered to eliminate or phase out all its import tariffs on South Korean goods within seven years, and remove tariffs on 80 percent of goods within three years after the deal comes into force.
Seoul says it would remove all tariffs on industrial goods within three years with some exceptions, and eliminate tariffs on roughly 68 percent of EU goods as measured in value in three years, compared with 63 percent in a previous offer. But the EU expressed disappointment with South Korea’s offer, saying it falls short of the accord South Korea signed with the United States in June. Last week, Seoul sweetened its offer for the second time.
"The EU side gave a positive mark on our newest offer... we called on the EU to make an improved proposal," Kim said.
One of the hottest issues of the trade negotiation is about auto trade and auto-related technical regulations. Brussels wants Seoul to cut regulations for European carmakers by applying international standards instead of different domestic rules.
"As to this issue, we will propose a new scheme to help the dispute be resolved. But it is uncertain whether Brussels accept it," Kim said. "The new proposal includes a quota and a grace period for cars imported from the European carmakers."
South Korea held out for an improvement in Europe’s offer to eliminate a 10 percent tariff on imported autos within seven years.
Earlier in the day, Ignacio Garcia Bercero, Brussels’ chief negotiator for the talks, said auto-related regulations are a "very fundamental issue" for the negotiations. "I hope this week’s negotiations would make progress," he said.
South Korea sold 74,000 autos worth US$9.1 billion in Europe last year while buying only 15,000 vehicles worth $1.6 billion.
The country’s tariff rate on cars is 8 percent, compared to 10 percent for the EU. The EU is South Korea’s second-largest trading partner after China, with bilateral trade reaching $79 billion in 2006. Some unofficial studies suggest a free trade agreement would boost that figure by as much as 40 percent in the long run.
If implemented, the free trade pact would be the largest for South Korea, surpassing the agreement signed with the U.S. that is still under legislative review.
The EU is also the largest foreign investor in South Korea, with $40.4 billion invested as of the end of 2006. Currently, South Korea has free trade agreements with Chile, Singapore and the European Free Trade Association as well as a partial pact with the Association of Southeast Asian Nations.
Seoul is also seeking similar trade deals with Canada, India and Mexico.
