The deal, inked yesterday by EU trade commissioner Catherine Ashton and Korean trade minister Kim Jong-hoon, is worth up to €19 billion, and is billed as “the most important ever negotiated between the EU and a third country”.
When it comes into effect in the second half of 2010, it will bring the end of almost all tariffs between the two economies, which amount to €1.6 billion for EU exporters across all industries today. It will also bring down non-tariff barriers like regulations and standards for a range of industries.
The Confederation of the Food and Drink Industries of the EU (CIAA) has said it looks forward to the timely conclusion of the agreement, “without which it could prove very difficult for European agri-food exporters to compete with their international counterparts on the Korean market”.
Annual agricultural sales to Korea amount to over €1 billion, and food and drink exports to South Korea.
Amongst the benefits to the sector, the trade organisation cites duty free access for a wide range of EU food products, high levels of protection for EU Geographical Indications and closer bilateral dialogue on sanitary and phytosanitary barriers to trade.
CIAA President, Jesús Serafín Pérez said, “Given the current economic downturn, with EU food and drink manufacturers (large and small) facing stiff international competition on global markets, the well-timed conclusion of the EU-Korea FTA will bode well for the future competitiveness of our industry.”
"This is the first 21st century free trade agreement for the EU, creating deep economic ties with another developed economy,” said Ashton. “It will create new market opportunities for European companies in services, manufacturing and agriculture. This agreement is particularly important in the current economic climate, helping to fight the economic downturn and create new jobs."