Korea-EU FTA Negotiations to Open on May 6

South Korea will officially announce the opening of free trade agreement (FTA) negotiations with the European Union (EU) on May 6 and begin the first round of negotiations on May 7.

If South Korea signs an FTA with the EU, the biggest market in the world, following the recently signed KORUS FTA, it will have two bridgeheads established in the first and second biggest markets, ahead of China and Japan.

The government held a ministerial meeting at the Gwacheon government complex supervised by Kwon Oh-kyu, deputy prime minister and minister of Finance and Economy, on May 1 and decided on opening the Korea-EU FTA negotiations.

EU members approved the launch of Korea-EU FTA negotiations unanimously at an EU Council meeting held in Luxembourg on April 23.

Accordingly, Kim Hyun-chong, the chief trade negotiator of the Ministry of Foreign Affairs and Trade, and EU Trade Commissioner Peter Mandelson will hold a joint press interview on May 6 in Seoul and officially announce the opening of the Korea-EU FTA talks.

The first round of negotiations will be held from May 7 to 11 at the Shilla Hotel, Jangchung-dong, Jung-gu, Seoul. It is planned that both sides will move between Seoul and Brussels, the capital city of Belgium, in order to hold 5 or 6 official negotiations during the rest of the year.

When the Korea-EU FTA comes into effect, South Korea will enjoy the effect of signing FTAs with 27 EU member countries simultaneously. The EU is the largest market in the world, with a population of 490 million and a gross domestic product (GDP, as of 2005) amounting to $13.6 trillion.

In the external trade of South Korea, the EU takes up 12.5% (as of 2006) which is the second biggest portion following China (18.6%), and leads the U.S. (12.1%) and the Association of Southeast Asian Nations or ASEAN (9.7%).

Since the average tariff rate of the EU is higher that those of other advanced countries such as the U.S., and since the EU imposes high tariffs on major exports of South Korea such as automobiles, textiles and consumer electronics, the government expects that a Korea-EU FTA will bring about immediate positive effects.

sanjuck@donga.com abc@donga.com