ID :
79377
Thu, 09/10/2009 - 18:21
Auther :
Shortlink :
https://www.oananews.org//node/79377
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S. Korea, EU to initial free trade deal in Oct.
By Park Sang-soo
SEOUL, Sept. 10 (Yonhap) -- South Korea and the European Union (EU) have agreed
to initial their free trade deal in October as both sides completed legal reviews
of the pact this week, Seoul's trade ministry said Thursday.
Both sides have held two rounds of legal review of the trade deal after
concluding the accord in July this year.
"South Korea and the EU have agreed to initial the deal next month," Lee Hye-min,
South Korea's deputy trade minister, said in a briefing. "But details such as the
date and the venue will be decided later."
The official expected that the deal would take into effect around July next year.
Overall, the deal is expected to boost bilateral trade between South Korea and
the EU by as much as 20 percent, according to estimates by the state-run Korea
Institute for International Economic Policy (KIEP).
Under the agreement, Seoul and Brussels will 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 after the deal takes effect.
The accord also permits duty drawbacks, which allow the tariffs levied on parts
used by manufacturers to make products such as cars 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 by Korean manufacturers" within five
years of the accord taking effect.
On the issue of rules of origin, both sides agreed on the level of allowable
foreign contents at 45 percent. In case of auto parts and others, the level is
set at 50 percent.
One of the most sensitive issues has been auto trade. After much wrangling, the
two sides agreed to eliminate tariffs on cars with an engine displacement of over
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 currently imposes an 8 percent import duty on European cars, while
the EU imposes a 10 percent duty on autos from South Korea.
The EU was South Korea's second-largest trading partner after China last year. In
2008, two-way trade totaled US$98.4 billion with South Korea enjoying a surplus
of $18.4 billion.
The EU was the biggest investor for South Korea last year with its accumulated
investment totaling $44.82 billion.
sam@yna.co.kr
(END)
SEOUL, Sept. 10 (Yonhap) -- South Korea and the European Union (EU) have agreed
to initial their free trade deal in October as both sides completed legal reviews
of the pact this week, Seoul's trade ministry said Thursday.
Both sides have held two rounds of legal review of the trade deal after
concluding the accord in July this year.
"South Korea and the EU have agreed to initial the deal next month," Lee Hye-min,
South Korea's deputy trade minister, said in a briefing. "But details such as the
date and the venue will be decided later."
The official expected that the deal would take into effect around July next year.
Overall, the deal is expected to boost bilateral trade between South Korea and
the EU by as much as 20 percent, according to estimates by the state-run Korea
Institute for International Economic Policy (KIEP).
Under the agreement, Seoul and Brussels will 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 after the deal takes effect.
The accord also permits duty drawbacks, which allow the tariffs levied on parts
used by manufacturers to make products such as cars 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 by Korean manufacturers" within five
years of the accord taking effect.
On the issue of rules of origin, both sides agreed on the level of allowable
foreign contents at 45 percent. In case of auto parts and others, the level is
set at 50 percent.
One of the most sensitive issues has been auto trade. After much wrangling, the
two sides agreed to eliminate tariffs on cars with an engine displacement of over
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 currently imposes an 8 percent import duty on European cars, while
the EU imposes a 10 percent duty on autos from South Korea.
The EU was South Korea's second-largest trading partner after China last year. In
2008, two-way trade totaled US$98.4 billion with South Korea enjoying a surplus
of $18.4 billion.
The EU was the biggest investor for South Korea last year with its accumulated
investment totaling $44.82 billion.
sam@yna.co.kr
(END)
