between the European Union and

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Free Trade Agreement

between the European Union and the Republic of Korea

Ing. Josef Vrbenský

Non-European Countries Department Ministry of Industry and Trade


Free Trade Agreement (FTA) with Korea – why?

From the beginning of negotiations until implementation (short excursion to the history)

Structure of the FTA

Economic impact of the FTA




Liberalisation of world trade is indispensable for growth of living standard and development of economy of any country

Slow progress in multilateral negotiations

Global Europe

Bilateral agreements with some of important trade

partners – emerging countries (Republic of Korea, India, ASEAN, Central America, Andean Community)

EU – interesting market for Korea

Korea – interesting market and gate to East Asia for EU

Why EU and Korea

decided on conclusion of FTA?


Beginning of negotiations – July 2007

8 rounds of negotiations, no time-out

Mixed competence, negotiations between EU and Korea, between Member States, inside Member States

Agreement of all Member States with definitive

version of the text – session of 133 Committee - 10 July 2009

Initialisation of text – 15 October 2009 in Brussels

Story of negotiations



Signature – 6 October 2010

Regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU-Korea FTA – approved 16 September 2010

Declarations of the European Commission (monitoring of the implementation of FTA)

Approval of National Assembly of Korea - 4 May 2011

Ratification in the Czech Republic (after approval of the Parliament) – 3 August 2011

Provisional implementation – 1 July 2011

Story of negotiations



Comprehensive agreement

15 Chapters –National Treatment and Market Acces for Goods, Trade Remedies, TBT, SPS, Customs Facilitation, Services and

Establishment, Capital Movements, Government Procurement, IPR, Competition, Transparency, Trade and Sustainable

Development, Dispute Settlement X No Protection of Investment

11 Main annexes

2 Protocols (Cultural Cooperation, Customs Cooperation)

1 Joint Declaration (on Turkey)

Structure of the FTA


Basic chapter of FTA, liberalisation of tariffs and elimination of NTBs

70 % items immediately, 99 % items in 5 years

Faster liberalisation in industrial items (interests of the Czech Republic): 1 – 3 years; Agriculture items:

75 % between 0 – 10 years, some items more (20 years maximum), quotas

NTBs – annexes (electronics - certification, cars – standards, pharmaceuticals – transparency in prices, chemicals – standard international regulations)

Market Access for Goods

Chapter 2


Liberalisation WTO+

MFN Clause, national treatment

General regulatory framework (sensitive information treatment, mutual recognition)

Services Trade Committee


Conditions for Czech exporters are more favourable in Korea than in other countries


Chapter 7


Studies of impact of the FTA on EU economy (May 2010) and Czech economy (July 2010)

Growth of export to Korea from EU of 82,6 % (27,1 % for the Czech Republic) and import from Korea to EU of 38,4 % (18,5 % for the Czech Republic)

Tariff savings for EU exporters – 1,6 billion EURO (12,5 million EURO for Czech exporters)

Small positive impact on GDP in EU (+0,08 %) and in Korea (0,84 %)

Economic Impact (1)


Growth of prosperity mainly in Korea (+1,12 %)

Better position (point of view of trade balance) for EU in chemical industry, machinery, agriculture and food products, some of services (assurance, transport)

Better position for Korea in textile, leather and

garment industry, cars and transport equipment

Strengthening of legal security

Economic Impact (2)


Opportunity for Czech exporters of services (4 % of mutual exchange today)

FTA opens new opportunities for Czech exporters of processing industry, transport equipment,

electric equipment, optical equipment, cars and car parts, machines and maintenance of

machines, rubber and plastic goods

Both studies are available on:

Economic Impact (3)


Results after the first two months of implemetation

Growth of mutual trade - +9,2 % (+ 77 % for the Czech Republic)

Positive trade balance for EU (for the first time in last ten years)

Growth of export of pork, wine, luxury goods, furniture, tools and chocolate

Sharp growth of trade in vehicles on both sides

Implementation (1)


Trade Committee provided by the UE-Korea FTA – First Session on 12 October 2011 in Seoul – adoption of rules of procedure and establishing of a list of 15 arbitrators

Other points of agenda of 1st Session of TC:

 Declaration of origin, Declaration of conformity

(Statute of exporter – 30 % of European companies x 60 % of Korean companies)

 NTBs (cars, cosmetic and pharmaceutical products, medical and surgical equipment)

Implementation (2)



Updates UE-South Korea FTA

Exporter's Guide to Import Formalities

Applied Tarrif Database

E-mail address: TRADE—EU—KOREA—

Useful information

on FTA (1)


Useful information

on FTA (2)


Thank you for your attention

Ing. Josef Vrbenský Tel: 00420 224 852 860 E-mail:




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