MEP accepts Ratification of EU-South Korea FTA
After having pushed through a safeguard clause to protect European industry, and received guarantees from Seoul that the new Korean law on carbon dioxide emission limits would not be detrimental to European Union (EU) car producers; the European Parliament (EP) has given its consent to the ratification of the FTA (EU-South Korea free trade agreement.)
The safeguard clause will let the European Union suspend further reductions in customs duties or increase them to previous levels, if lower rates lead to an excessive increase in imports from South Korea, causing or threatening to cause "serious injury" to European Union
manufacturers. It was proposed, in particular, to safeguard the European automotive sector.
"With the safeguard clause built in, this deal is very good news for European industry. We have opened our markets to cheaper products that will benefit consumers and Korea has opened its markets to our exporters, who will benefit from significant extra demand"', said Robert Sturdy, the MEP steering the legislation through the EP.
Originally initialled in October 2009, the FTA, the European Union first with an Asian country, was finally signed in Brussels on October 6 last year. Its date of provisional application was fixed at July 1, 2011, provided that the EP had given its consent to the FTA and a regulation implementing the safeguard clause was then in force.
The long-awaited FTA aims to eliminate about 98% of import duties and other trade barriers in manufactured goods, agricultural products and services over the next five years. It is expected to create new trade in goods and services worth €19.1bn (USD25.9bn) for the European Union and save European Union exporters USD1.6bn a year in tariffs. It also covers trade-related activities such as government procurement, intellectual property rights, labour standards and environmental issues.
What is more, South Korean textile and clothing tariffs currently stand at over 10%, and the agreement envisages the immediate elimination of much of the EUR60m in duty levied annually on European Union exporters. By eradicating all duplicative requirements in the form of costly testing and certification procedures, the FTA also removes barriers to trade in consumer electronics and household appliances such as television sets, microwave ovens, computers, telecoms equipment and mobile phones.
For example, under the agreement, not only will the 8% tariff on European Union cars exported to South Korea be removed, but European Union car producers will be able to sell their products - produced according to European Union specifications - without being subject to additional testing. The FTA also establishes a working group/monitoring committee to avoid hidden protectionism through new technical barriers to trade in the future.
European Union Trade Commissioner, Karel De Gucht, also welcomed the EP's support for the FTA. “I am delighted that MEP have so clearly supported this deep and innovative trade agreement – the European Union most ambitious to date and the first with an Asian country," he said.
"This is a landmark agreement and a benchmark for what we want to achieve with other key trading partners."
