An FTA between EU-US to hurt South Korea

José Manuel Barroso, President of the EC on the right, and Kim Jong-Hoon, Member of the South Korean National Assembly, participated in the public lecture to commemorate 50 years of EU/South Korea diplomatic relations, (21/02/2013). EC Audiovisual Services).

José Manuel Barroso, President of the EC on the right, and Kim Chang-beom Head of the Mission of South Korea to the EU, participated in the public lecture to commemorate 50 years of EU/South Korea diplomatic relations, (21/02/2013). (EC Audiovisual Services).

Ten days ago, Brussels and Washington issued a joint statement signed by three Presidents, namely the US leader Barack Obama, the European Council President Herman Van Rompuy and European Commission President José Manuel Barroso. With it, the EU and the US announced their decision to conclude a bilateral Free Trade Agreement (FTA) by the end of 2014. The tight time schedule for its conclusion and the fact that this FTA will cover the trade between two partners, who account for half the world’s GDP, triggered the alarms all over the business world.

South Korea was the first country to start thinking about the repercussions on its own affairs of a possible FTA between the EU and the US. The fact is that South Korea is the only country of the world to have concluded and currently applying an FTA with the EU. So, this country had to come up with an early evaluation of this new major development in international trade. Reportedly, this first evaluation is negative. South Korea is also running a free trade agreement with the US. Let’s follow the facts.

EU and S. Korea

Last year, on 1 July 2012, the EU and South Korea marked the one year anniversary of the implementation of their own FTA. The EU-South Korea FTA has been in force since 1 July 2011. As the FTA has lowered import tariffs for European products at the Korean border, it’s estimated that EU firms have already made cash savings of €350 million in duties after just 9 months.

The EU-South Korea FTA is the first of its kind the EU concludes with a third country, after the World Trade Organisation Doha Round collapsed in July 2009. According to a Commission’s assessment, this FTA is unprecedented in terms of the scope and speed of tariff liberalisation and breaks new ground in tackling significant non-tariff barriers across all sectors, including automotive, pharmaceutical and consumer electronics. South Korea and the EU will eliminate 98.7% of duties in trade value within 5 years from the entry into force of the FTA. By the end of the transitional periods, import tariffs will be eliminated on all industrial products, and most agricultural products, with a few exceptions, such as rice. Let’s return however to the side effects from the EU-US possible FTA.

Side effects

South Korean media reported last Friday a statement by Lim Noh-Jong, an analyst at I’M Investment & Securities Co. who said, “South Korea stands to benefit from a situation where there are trade barriers between the U.S. and the EU”. Understandably, if those trade barriers between EU and US are lifted South Korea will suffer a blow. As a result, Lim concluded, “We may lose advantages in the two markets should they sign an FTA.” The same sources also reported Kim Hyung-Joo, a researcher at the LG Economic Research Institute as saying that such a deal between EU and US could also hurt China, which is South Korea’s largest trading partner.

On the official level, Park Jong-Han, a representative of the South Korean Ministry of Foreign Affairs and Trade, also commented negatively by saying that, “South Korea may no longer benefit from preferential tariffs. Local exporters must utilize South Korea’s free trade pact with the two regions to beef up their competitiveness.” Last but not least, it has to be noted that in the first months of South Korea’s trade agreements with the EU and the US the country’s exports to the former shrunk, while they grew towards the latter.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

EU revengefully shows no mercy to Cameron by demanding a fast and sloppy Brexit now

Pro-EU forces won a 70% triumph in the European elections

Syria: Why did the US now take the Russian offer for a truce? What next?

Cyprus Parliament says no to blackmail

“No labels for entrepreneurs!”, a young business leader from Italy cries out

While EU Open Days 2013 discuss the 2020 strategy, Microsoft shares a glimpse of EU 2060

Eurozone’s north-south growth gap to become structural

Bankruptcy or referendum: which one is going to be first?

A Sting Exclusive: “Paris and beyond: EU action and what COP21 should deliver”, Green MEP Keith Taylor discusses from Brussels 

A European young student speaks about the Youth Policies of the European Commission

Germany objects to EU Commission’s plan for a Eurozone bank deposits insurance scheme but Berlin could go along

Jade Spring Meeting 2017 – day 2: Coporate workshops, general assembly and magna moment

MWC 2016 LIVE: GTI shifts to phase two – 5G – after hitting milestones

Facebook and Google to treat Europe as the 51st State of the USA

European Development Days 2013

Commission deepens criticism on German economic policies

World Retail Congress announces Dubai 2016 Hall of Fame Inductees

Is poverty and exclusion the necessary price for EU’s recovery?

Ukraine: Is there a political force able to undo the division?

The Commission breathless behind the horsemeat scandal

For how long and at what cost can the ECB continue printing trillions to keep euro area going?

EU seems to fail its moderate migration promises postponing them for end 2015

Parliament sets conditions on EU-China investment deal

A Sting Exclusive: Paris Climate Change Summit, a defining moment for humanity, by Ulf Björnholm Head of UNEP Brussels

Impacting society with digital ingenuity – World Summit Award proclaiming the top 8 worldwide

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

Why youth unemployment is so difficult to counter

A Sting Exclusive: “There can be no global deal on emissions without China and the USA”, Conservative MEP Ian Duncan stresses from Brussels

On Grexit: Incompetence just launched the historic Ultimatum that could open “pandora’s box”

Transition between education and employment: how the internship culture is threatening the foundations of our education

UN-based World Summit Award (WSA) presents its master list on digital innovation with impact on society from 24 countries

Cameron postpones speech in Holland

Berlin cannot dictate anymore the terms for the enactment of the European Banking Union

EU sets ambitious targets for the Warsaw climate conference

The EU seals CETA but plans to re-baptise TTIP after missing the 2016 deadline

Europe eyes to replace US as China’s prime foreign partner

EU Commission accuses Germany of obstructing growth and the banking union

Why Europe is more competitive than the US

Greek citizens to pay the price again but Tsipras risks losing next elections

European Commission: Does Apple, Starbucks and Fiat really pay their taxes?

EU Council approves visa-free travel for Ukraine and cement ties with Kiev

Galileo funding: A ‘small’ difference of €700 million

Will Europe be able to deal with the migration crisis alone if Turkey quits the pact?

A reflection of health inequity in recent epidemics

Nigel Farage and Boris Johnson: who forced the two ‘brave’ Brexiteers to quit?

How can consumers be effectively protected from insurance sellers?

EU Banks still get subsidies from impoverished citizens

Is there a de facto impossibility for the Brexit to kick-start?

Why the financial scandals multiply?

The US and EU decisively oppose Erdogan’s plans for Turkey and beyond

European Youth Vlog

I’m not feeling lucky: The “Right to Be Forgotten” ruling puts Google inside a box

Eurozone dignitaries play with people’s life savings

The EU Commission fails to draw the right conclusions about corruption

18th European Forum on Eco-innovation live from Barcelona: What’s next for eco-labelling?

How much more social deterioration can the EU people endure?

Post-Brexit muddled times: the resignation of UK’s top ambassador and Theresa May’s vague plans

Entrepreneurship’s key to success showcased by a serial young entrepreneur

Consumers suffer three defeats

Commission threatens Chinese firms with trade penalties

More Stings?

Comments

  1. hey there and thank you for your info – I have certainly picked up anything new from right here.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s