High level negotiators of European Union and South Korea have recently concluded a four-day meet to discuss future co-operation in international trade and broadening the scope of free trade between them. The eighth round of talks which held in Brussels is claimed to be a partial success as both officials felt there was consensus in various issues, and other outstanding issues could be resolved before the deal got ratified by this year end. The EU has initiated a program to expand their business area extending up to India, and as part of this program, they planned to start it with South Korea. Similarly, S. Korea too wants to beat the global slowdown by improving ties with the EU which is the second largest trading partner after China. The two-way trade amounted close to $90 billion in 2006 and both officials believe, if they succeed in striking a Free Trade Agreement, it will open immense business opportunities to both sides.
The EU is wary of the US’ haste of entering into pacts with countries across the world in recent times, and this has alerted the EU to have similar business approach in responding to the prevalent trade practices. Besides, the EU has to expedite the process of inking all possible deals before the year end because the Lisbon Treaty on the EU institutional reform is likely to be in effect from next January. The treaty will give powers to the EU elected leaders to approve or reject the trade deals which at present, rest in the hands of the trade specialists of the European Commission.
The EU has to deal with the contentious issue of opening up the car market of S. Korea to accept the international standards rather than their stringent domestic standards. South Korea sold 74,000 automobiles against Europe’s 15,000 units last year. The lopsided sales figures are an indicator to the tight Korean Standards. However, both sides claim they have made significant progress in the area of “rules of origin” – the question of whether a product should qualify for lower import duties, if much of its components are made outside a state, which is party to the pact. The chief negotiator of the EU Ignacia Garcia Bercero and the South Korea’s Lee Hye-min felt the deal would be through with huge concessions being made by both parties. Korea is also keen on signing similar deals with Canada, India and Mexico; and already they have FTAs in force with Chile, Singapore and European Free Trade Association.