ID :
192219
Fri, 07/01/2011 - 09:16
Auther :
Shortlink :
https://oananews.org//node/192219
The shortlink copeid
S. Korea-EU FTA takes effect, sets new era for bilateral relations
(ATTN: ADDS quotes from trade minister in paras 9-10)
SEOUL, July 1 (Yonhap) -- The free trade pact between South Korea and the European Union (EU) came into effect on Friday, ushering in a new era of expanded economic and political ties that can benefit all countries.
The free trade accord, signed in October last year and ratified by lawmakers, is the most ambitious deal that South Korea has ever finalized, and is the first of its kind between an East Asian country and the EU.
The EU is the second-largest trading partner for South Korea after China and buys around 20 percent of Korean exports annually. Last year, trade between the 27-member economic bloc and South Korea totaled US$92.2 billion, up around 17 percent from 2009. South Korea's exports to the eurozone reached $53.5 billion last year, with Asia's fourth-largest economy reporting a trade surplus of $14.8 billion.
Experts say that the free trade deal will pave the way for South Korean companies to tap deeper into the world's single largest economic bloc with a population of 500 million people and a gross domestic product of $16.3 trillion as of 2010.
"On the back of the free trade deal, the trade surplus from relatively competitive sectors will increase, and our economy will be upgraded," said Choe Nak-kyun, a researcher at the Korea Institute for International Economic Policy (KIEP).
Overall, the deal is expected to boost bilateral trade between South Korea and the EU by as much as 20 percent in the long term, according to earlier estimates by the KIEP.
The KIEP said the free trade accord with the EU would help boost South Korea's exports by $11 billion and its economic growth by 5.6 percent while creating up to 253,000 jobs over the long haul.
"The FTA with the EU will boost bilateral investment and trade, and help solidify a strategic partnership as well," Seoul's trade ministry said earlier. "Also, the free trade deal will improve the South Korean economy's transparency and credibility, and boost our economy's productivity and economic growth," it said.
In a ceremony to mark the implementation of the free trade accord, South Korean Trade Minister Kim Jong-hoon said the Korea-EU free trade deal will boost the flow of goods, investment and ideas for both sides.
"The free trade deal will bring South Korea and the EU closer than before and contribute to prosperity in both economies," Kim said.
Under the deal, Seoul and Brussels would eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect. They have also agreed to abolish tariffs on most industrial goods within five years of the deal taking effect.
The accord also permits duty drawback, which allows the tariffs levied on parts used by a manufacturer to make a product such as a car to be refunded when the final product is exported.
But the deal includes a provision that caps refundable tariffs should there be "dramatic changes in foreign outsourcing" within five years of the accord taking effect.
On the issue of country of origin rules, both sides agreed to limit the level of allowable foreign contents at 45 percent. In the cases of auto parts and some other products, the level has been set at 50 percent.
One of the most sensitive issues has been the auto trade. After much wrangling, the two sides agreed to eliminate tariffs on cars with an engine displacement of more than 1.5 liters within three years. Tariffs for smaller cars with an engine displacement of less than 1.5 liters would be lifted after five years.
South Korea previously imposed an 8 percent import duty on European cars, while the EU levied a 10 percent duty on autos from South Korea.
Also, South Korea agreed to lift tariffs for some machinery, textiles and 38 other items after seven years.
SEOUL, July 1 (Yonhap) -- The free trade pact between South Korea and the European Union (EU) came into effect on Friday, ushering in a new era of expanded economic and political ties that can benefit all countries.
The free trade accord, signed in October last year and ratified by lawmakers, is the most ambitious deal that South Korea has ever finalized, and is the first of its kind between an East Asian country and the EU.
The EU is the second-largest trading partner for South Korea after China and buys around 20 percent of Korean exports annually. Last year, trade between the 27-member economic bloc and South Korea totaled US$92.2 billion, up around 17 percent from 2009. South Korea's exports to the eurozone reached $53.5 billion last year, with Asia's fourth-largest economy reporting a trade surplus of $14.8 billion.
Experts say that the free trade deal will pave the way for South Korean companies to tap deeper into the world's single largest economic bloc with a population of 500 million people and a gross domestic product of $16.3 trillion as of 2010.
"On the back of the free trade deal, the trade surplus from relatively competitive sectors will increase, and our economy will be upgraded," said Choe Nak-kyun, a researcher at the Korea Institute for International Economic Policy (KIEP).
Overall, the deal is expected to boost bilateral trade between South Korea and the EU by as much as 20 percent in the long term, according to earlier estimates by the KIEP.
The KIEP said the free trade accord with the EU would help boost South Korea's exports by $11 billion and its economic growth by 5.6 percent while creating up to 253,000 jobs over the long haul.
"The FTA with the EU will boost bilateral investment and trade, and help solidify a strategic partnership as well," Seoul's trade ministry said earlier. "Also, the free trade deal will improve the South Korean economy's transparency and credibility, and boost our economy's productivity and economic growth," it said.
In a ceremony to mark the implementation of the free trade accord, South Korean Trade Minister Kim Jong-hoon said the Korea-EU free trade deal will boost the flow of goods, investment and ideas for both sides.
"The free trade deal will bring South Korea and the EU closer than before and contribute to prosperity in both economies," Kim said.
Under the deal, Seoul and Brussels would eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect. They have also agreed to abolish tariffs on most industrial goods within five years of the deal taking effect.
The accord also permits duty drawback, which allows the tariffs levied on parts used by a manufacturer to make a product such as a car to be refunded when the final product is exported.
But the deal includes a provision that caps refundable tariffs should there be "dramatic changes in foreign outsourcing" within five years of the accord taking effect.
On the issue of country of origin rules, both sides agreed to limit the level of allowable foreign contents at 45 percent. In the cases of auto parts and some other products, the level has been set at 50 percent.
One of the most sensitive issues has been the auto trade. After much wrangling, the two sides agreed to eliminate tariffs on cars with an engine displacement of more than 1.5 liters within three years. Tariffs for smaller cars with an engine displacement of less than 1.5 liters would be lifted after five years.
South Korea previously imposed an 8 percent import duty on European cars, while the EU levied a 10 percent duty on autos from South Korea.
Also, South Korea agreed to lift tariffs for some machinery, textiles and 38 other items after seven years.
