Seoul (AsiaNews) – South Korea and the European Union began yesterday free trade talks in Seoul. They are scheduled to last till May 11.
“A [South] Korea-EU FTA (Freed Trade Agreement) will provide an excellent opportunity for [South] Korea to become the East Asia FTA hub linking Europe, Asia and the United States,” said Kim Hyun-chong, South Korea's trade minister.
“For the EU it represents a turning toward and a stronger focus on Asia, and for [South ] Korea it means taking a further global step, in reaching out across the international trading system rather than simply relying on regional markets,” said EU Trade Commissioner Peter Mandelson.
External trade accounts for about 70 per cent of South Korea’s gross domestic product.
Over 50 per cent of global trade volume occurs between countries locked in free trade agreements.
“As such, opening our market is not a matter of chance but a matter of survival,” Mr Kim.
Trade between South Korean and the EU reached over € 60 billion (US$ 80 billion) in 2006. The EU is South Korea's largest trading partner after China and its largest source of investment.
Last year, accumulated investment from the EU totalled US$ 40.5 billion, followed by the United States with US$ 36.6 billion and Japan with US$ 19.5 billion.
Major South Korean export items are cars, consumer electronics, semiconductors, and ships— expected areas of interest in the Korean market by the 27-member European economic bloc are cosmetics, chemicals, machinery, automobiles and pharmaceuticals.
The EU is also expected to show interest in gaining greater access to Korea's service sector, especially its finance, special delivery, legal, accounting and news services, Kim noted.
For its part, South Korea is interested in easing immigration regulations for its own professionals like nurses, architects and veterinarians to work in Europe.
The average EU tariff is slightly lower than that of South Korea, but for certain major export items, however, it is significantly higher, such as for cars 10 percent, textiles 12 percent and electronics up to 14 percent.
According to a 2005 report by the Korea Institute for International Economic Policy, a South Korea-EU Free Trade Agreement should boost national income by 16 trillion won to 24 trillion won (from US$ 17 to 26 billion)
At present, South Korea is opting for bilateral agreements. In April it signed a free trade agreement with the United States. And on June 1 another agreement will come into effect with the countries of the Association of South-East Asian Countries (except Thailand).