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
Implementation
Contents
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
(1)
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
(2)
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
Services
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:
http://www.mpo.cz/dokument77267.html
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)
MADB (http://madb.europa.eu/mkaccdb2/indexPubli.htm)
Updates UE-South Korea FTA
Exporter's Guide to Import Formalities
Applied Tarrif Database
E-mail address: TRADE—EU—KOREA—FTA@ec.europa.eu
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: vrbensky@mpo.cz
