S. Korea, EU to announce free trade deal in early April: officials

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SEOUL, March 16 (Yonhap) -- South Korea and the European Union have virtually
wrapped up their negotiations to forge a free trade agreement and are set to
formally announce the deal early next month, officials said Monday.
South Korea, Asia's fourth-largest economy, and the EU, the world's
single-largest economic bloc, started the talks in May 2007, but differences over
industrial tariffs and other sensitive issues have limited progress.
The two sides will hold an eighth round of negotiations on March 23-24 in Seoul in
what will be their final round of talks and officially announce the deal at a
summit of Group of 20 nations on April 2 in London, South Korean officials said.
"With both sides publicly declaring the deal at the G-20 summit in London, they
will show that protectionist measures can't resolve the current economic crisis,"
said an official at the South Korean government.
According to multiple officials, South Korea and the EU agreed to eliminate or
phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods
within three years.
Eventually, Seoul and Brussels agreed to abolish tariffs on all industrial goods
within five years after the deal comes into force, they said.
As for auto trade, one of the most sensitive issues, the two sides agreed to
eliminate tariffs on cars with engine displacement of over 2.5 liters within
three years. For cars with engine displacement of less than 2.5 liters, they
agreed to abolish tariffs within five years, officials said.
Currently, South Korea imposes an eight percent import duty on European cars,
while the EU imposes a 10-percent duty on South Korean cars.
In another sensitive issue, the two sides have virtually agreed to set up a joint
committee to study allowing goods made at an inter-Korean industrial complex in
North Korea to get duty-free status in the European market.
However, South Korea won't allow the EU to use a tag of "made in EU" on its
products, officials said.
Officials at the EU's representative office in Seoul weren't immediately
available for comment.
The EU was South Korea's second largest trading partner after China last year,
with two-way trading reaching more than US$90 billion.
South Korea reached a free trade deal with the United States in 2007, shortly
before it launched the talks with the EU. The South Korea-U.S. trade deal should
be approved by both nations' legislatures.
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