European and Korean negotiators clashed on tariff concessions at their September meeting on a bilateral free trade agreement that both sides hope to conclude promptly.
Chief among the EU’s concerns was that Korea was proposing to cut tariffs on European industrial and agricultural goods more slowly than it had agreed to do under the US-Korea FTA finalised in June. According to chief EU negotiator Ignacio Garcia Bercero, EU exporters of some industrial goods would face higher Korean import tariffs than their US competitors for five years, and even longer in the case of some agricultural products.
Chief Korean negotiator Kim Han-soo countered that there was no reason why the EU should automatically obtain a deal identical to the one Korea negotiated with the US, particularly as the EU’s own offer in some areas fell short of US concessions. Nevertheless, Korea Times reported on 21 September that the two sides ultimately agreed to use the US-Korea pact as a benchmark for further negotiations.
The EU has offered to eliminate duties on 72 percent of bilateral trade as soon as the agreement is signed. The share of duty-free trade would rise to 79 percent within three years, and tariffs on all Korean goods would be phased out completely within seven years.
Korea reportedly is willing to lift tariffs immediately on 45 percent of bilateral trade. Tariffs on all EU industrial goods ‘with some exceptions’ would be removed within three years. In terms of value, 68 percent of European goods would enter Korea duty-free within three years of the FTA’s entry into force.
As with the US, market access for automobiles is a key issue for the EU. Brussels wants Korea to remove technical standards that restrict EU exports, and seeks a quick elimination of Korea’s 8 percent tariff on automobile imports. Last year, 74,000 Korean cars were sold in Europe, while Korea imported only 15,000 vehicles from the EU.