Envoy says pact offers advantages for Korea over EU’s other Asian trading partners
The rollercoaster ride on the road to ratify the Korea-EU free trade agreement was completed last week, bringing with it better opportunities for both Korea and EU members.
The pact is the first major step in eliminating Korea’s practices of protecting local industries.
“This is very unique and special not only for Korea but for the European Union,” Ambassador and Head of the European Union Delegation Tomasz Kozlowski told The Korea Herald.
“This (Korea-EU FTA) is the most comprehensive and deepest trading agreement that the EU has ever concluded,” he added.
Trade between both parties hit $54 billion last year. The European Union is the largest foreign investor in Korea. Furthermore, studies estimate that the deal will more than double bilateral Korea-EU trade in the next 20 years.
The crux of the deal will eliminate up to 98 percent of customs duties. The majority of tariffs will be abolished on July 1, with tariffs in some other areas being gradually phased out over the next 3-7 years.
Ambassador and Head of the European Union Delegation Tomasz Kozlowski (Yoav Cerralbo/The Korea Herald)
Some products are excluded from the pact, such as rice for example.
The deal covers traded goods and services and will remove a significant number of non-tariff barriers as well as help both sides recognize common standards in many areas and fields, “so it’s really a comprehensive deal,” Kozlowski said.
“This FTA will open a new chapter in the bilateral relations between the European Union and Korea,” he added during his first interview with the local English press.
The most notable feature is that Korean businesses will have direct access to the world’s largest economic bloc.
Ideally, the deal will improve the flow of goods, reduce prices for consumers and create jobs on both sides.
“Since Korea is the first partner that we have concluded such an agreement with in Asia, this means that Korea will get advantages over other Asian trading partners with the European Union,” Kozlowski noted.
The EU is currently in negotiations with Vietnam, Singapore, and to some extent, with India. There is also talk of examining the possibilities of a trade pact with Japan.
“The implementation of this FTA will be felt by consumers,” he said. “That’s why I think that now, the main task we’re facing on both sides is to prepare the implementation of this agreement properly.”
The European side has taken the necessary steps to adjust the legal basis for the implementation.
In Korea, the government is currently working on a number of bills which should be adapted before deal’s entry into force.
Both sides have started awareness campaigns geared toward small and medium-sized companies.
The Korea Customs Service plans to hire an additional 80 officials to visit SMEs around the county and inform them of the new opportunities available.
“For both sides, it is extremely important to make businesses aware of this new situation and to help them use these new opportunities,” he said.
The EU Delegation is also planning seminars starting in June for European companies operating in Korea and for Korean businesses trading with the 27-member bloc.
“We are going to have experts from different fields such as customs offices, property rights, and other fields,” Kozlowski said.
While this deal is probably the most important part of Kozlowski’s term right now, the ambassador is also looking to accentuate other areas of the relationship.
Korea is planning to invest about 5 percent of its GDP in research and technology.
“Europe is one of the leaders in the field so we believe there is great potential to develop cooperation and we have special programs for that,” he said.
In the education sector, Kozlowski would like to see more Korean students taking advantage of the EU’s Erasmus Mundus scholarship scheme.
“Proportionally, out of all Asian countries, there are more students from China and India taking advantage of the scholarship than from Korea,” he said. “So we want to encourage Korean students to use this instrument.”
One area of the economy that is showing signs of potential is the green sector.
Korea is currently thinking of introducing an emissions trading system.
“We introduced such a system 10 years ago. We know what kind of mistakes we committed, what kind of good experiences. That’s why we already organized seminars to inform our Korean partners about our experiences, and we are going to cooperate on this as well,” he said.
By Yoav Cerralbo (email@example.com