S Korea welcomes free trade pact with EU

South Korean market and media gave a warm welcome to the report that the European Union (EU) approved the South Korea-EU free trade pact which was initialed in October, 2009.

Approving the trade deal, the EU also agreed to have it go into effect from July 1, 2011, as a result of long-lasting rounds of bilateral negotiation.

The two sides are expected to seal the accord at a summit in Brussels on Oct. 6 if ratified by both South Korean parliament and the European Parliament.

PROGRESS REPORT OF S. KOREA-E.U. FREE TRADE DEAL

South Korea and the European Union (EU) officially launched the bilateral free trade negotiations in May 2007, with difference over industrial tariffs and auto trade initially hampering progress.

The two sides have held eight rounds of free trade talks, together with several inter-session meetings, for 26 months to narrow the gap in their stances over sensitive issues.

After going through years of struggles, the two sides settled a "provisional" agreement on the bilateral free trade negotiations in late March, reaching a compromise in various points.

The provisional agreement said that the two sides reached a tentative agreement on eliminating or phasing out tariffs on 96 percent of EU goods and 99 percent of South Korea's goods within three years.

They have also agreed to abolish tariffs on all industrial goods within five years after the pact takes effect, together with agreeing to eliminate tariffs on cars within three years to five years.

Amid growing expectations on an early settlement, the thorniest issues held back the final agreement for which South Korean Trade Minister Kim Jong-hoon and his EU counterpart, Catherine Ashton, met at a ministerial-level meeting in London.

During the meeting which was held on the sidelines of the G-20 summit, the two ministers discussed over the remaining sensitive issues, such as a duty drawback scheme and rules of origin, which caused the leaders to meet again in Paris later in June.

On the final draft of the agreement, the EU agreed to allow a duty drawback system for South Korean companies, which it does not allow for Chile and Mexico under current free trade agreements, South Korean Deputy Trade Minister Lee Hye-min said.

Concluding the negotiations in July, the two sides initialed the pact in October, seeking to finalize follow-up process in 2010.

The process, however, was halted for a while as the EU's Foreign Affairs Council postponed its decision to sign the deal due to opposition from some member countries such as Italy.

After months of talks, the South Korean side succeeded to convince its counterparty, finally gaining the approval from the council.
(Source:xinhua)