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

Advertising

Advertising

Advertising

Featured Stings

The Future of Retail: Changing shopping patterns will mean retailers need to invest in costly and complex solutions

Is our brave new world about to burst?

The impossible end of the war in Syria

Alexis Tsipras ready to test Eurozone’s political sturdiness; Up to what point?

Environmental labelling, information and management schemes are central to the circular economy

ECB will be the catalyst of Eurozone’s reunification

The European giant tourism sector in constant growth

Europe votes against GMOs but the Council votes for TTIP

Everybody for himself in G20 and IMF

Roxane in Cambodia

ITU Telecom World 2017: exploring smart digital transformation

Greece: Tsipras’ referendum victory does not solve the financial stalemate of the country and its banks

MWC 2016 LIVE: Xiaomi looks to revive growth with flagships

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

Light at the end of the Eurozone tunnel

Close to final agreement on the EU Banking Union

To all far-right partisans who exploit Charlie Hebdo atrocity: a peaceful reply given by a peaceful student

European Youth Vlog

Currency Union might not let an independent Scotland join the EU as the “Yes” front now leads

How dearly will Germany pay for the Volkswagen emissions rigging scandal

ECB to buy corporate bonds: Will government financing be the next step?

Progress in medical research: leading or lagging behind?

Eurozone: Subdued inflation can lead to more recession

G20 LIVE: G20 Statement on the fight against terrorism

For Youth Rights: steps forward for better protection.

Trump and Brexit: After the social whys the political whereto

Trade surplus up production down in Eurozone

Eurozone’s credibility rock solid

In China things are moving in the right direction

Merkel’s triumph will make Berlin more unbending

ECB’s €1.14 trillion again unifies Eurozone; Germany approves sovereign debt risks to be pooled

“Working together to make a change at the COP 21 in Paris”, an article by Ambassador Yang of the Chinese Mission to EU

The West and Russia took what they wanted from Ukraine

Preparing for developing countries the ‘Greek cure’

China Unlimited Special Report: at the heart of Beijing


Re-thinking citizenship education: bringing young people back to the ballot box

MWC 2016 LIVE: Zuckerberg warns mobile industry not to ignore the unconnected

‘Internal security’ or how to compromise citizens’ rights and also make huge profits

Collaboration: the key to success in the digital economy

European Youth calls on European Council for urgent action on “humanitarian crisis” and questions the EU/Turkey deal respect of human rights

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

EU Commission: Germany can make Eurozone grow again just by helping itself

European Court of Justice to Google: It is #righttobeforgotten but not #righttoberemembered

European Youth Forum welcomes strong stance on human rights in State of the Union

Eurozone: Bankers-politicians rig keeps robbing taxpayers

Legal Manager – 2050

European Union: Retail sales show deep recession

Draghi’s top new year resolution: Quantitative Easing

New VAT rules in the EU: how a digital sea could have become an ocean

French elections: by the time the EU economy revives and the migration crisis is solved extremists could take over Europe

European Globalisation Adjustment Fund, who gets it and who pays the bill?

Apple’s tax avoidance scheme remains as creative as their new iPhone

Varna (Bulgaria) awarded European Youth Capital 2017

The financial sector cripples Eurozone growth prospects

Liaison Officer – 2020

Chatterbox Rome Declaration cannot save the EU; Germany has to pay more to do that

European Court rules that ECB’s OMT program of 2012 is OK; not a word from Germany about returning the Greek 2010 courtesy

The big five EU telecom operators in dire straights

EU Banks still get subsidies from impoverished citizens

EU Commission expects consumer spending to unlock growth

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