Korea and the European Union yesterday initialed their bilateral free trade agreement with no changes in the general framework. New provisions were added, however, and others were further refined.
One commerce expert said, Overall, the agreement will help Korea increase exports to Europe, adding, The agreement has certain provisions that clearly show gains and losses. Other provisions will put Korea at a disadvantage over the short term, but will help Korea improve domestic institutions in line with those in advanced economies over the long term.
The Korean Trade Ministry will post the English-language version of the agreement on its home page Monday. The one in Korean will be posted early next month.
The EU will eliminate tariffs on Korean products faster than Korea will on EU products. This will help Korea protect its domestic industries while increasing exports to the EU.
Tariffs on 99.4 percent of Korean products exported to the EU and 95.8 percent of EU products imported to Korea will be eliminated within three years. The EU will eliminate tariffs on Korean products within five years, while Korea will do for 99.5 percents of EU products.
The remaining five percent include 45 items such as woolen goods, heavy construction equipment, print machinery, metal cutting and processing machinery. Their tariffs will be eliminated within five years to allow domestic companies to gain the upper hand.
Safeguards to brace the agricultural sector for a sudden increase in imports of EU agricultural products were also put in place. Sixteen items including rice and related products were excluded from opening.
Both sides also agreed to maintain safeguards for nine agricultural and livestock products such as beef, frozen pork and sugar.
Considering that Korea and the EU harvest grapes, oranges and tangerines almost at the same time because they are in the Northern Hemisphere, tariffs on EU grapes will be imposed from May through Oct. 15, and those on oranges from September through February the next year.
Despite the safeguards, damage to the Korean agricultural and livestock sectors is believed to be inevitable.