A free trade pact between South Korea and the EU will bring great economic benefit to both sides, and break ground for the consolidation of the two markets, an EU diplomat said Friday.
On Thursday, the European Parliament approved the free trade pact with South Korea, bringing it one step closer to coming into force this July. Seoul and Brussels signed their bilateral free trade agreement (FTA) on Oct. 6 following two-and-a-half years of negotiations, agreeing to put the pact into effect starting on July 1.
The deal also still needs to be ratified by South Korea's parliament in order to go into effect as was scheduled.
"We are at the beginning of a new era in the EU-Korea relationship," said EU ambassador to Korea Tomasz Kozlowski.
The trade accord is the most ambitious free trade pact the European Union (EU) has so far negotiated, and the first of its kind with an Asian country, he said.
"This FTA is a win-win deal to both sides and will bring great benefits to both EU and Korean businesses, workers and consumers on both sides," he said. "What's important is that South Korean firms will get more access to the European market."
The South Korean government submitted the trade pact to the parliament in October last year for approval, but opposition parties have boycotted reviewing free trade pacts, including a similar deal with the United States.
Earlier this week, South Korea's main opposition party, however, agreed to end a two-month parliamentary boycott that has floated dozens of legislative bills, including free trade deals with the U.S. and the EU.
"For the European side, all things have been done for the provisional implementation of the deal as scheduled. I hope these procedures (approval of the deal by South Korea's parliament) will go smoothly and be completed as soon as possible before July," Kozlowski said.
The EU-Korea relation goes beyond economy and trade, he said.
"A declaration of strategic partnership adopted between South Korea and the EU will lead us to strengthen political partnership and cooperation on a broad range of global economic governance to fight against climate change," Kozlowski said.
Overall, the South Korea-EU deal is expected to boost bilateral trade by as much as 20 percent in the long term, according to earlier estimates by the state-run Korea Institute for International Economic Policy (KIEP).
In 2009, two-way trade totaled US$78.8 billion with South Korea enjoying a surplus of $14.38 billion. In 2008, their bilateral trade reached $98.4 billion.
Under the deal, Seoul and Brussels would eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect. They have also agreed to abolish tariffs on most industrial goods within five years of the deal taking effect.
One of the most sensitive issues has been auto trade. After much wrangling, the two sides agreed to eliminate tariffs on cars with an engine displacement of more than 1.5 liters within three years. Tariffs for smaller cars with an engine displacement of less than 1.5 liters would be lifted after five years.
South Korea currently imposes an 8 percent import duty on European cars, while the EU imposes a 10 percent duty on autos from South Korea.