Published : 2010-03-30 15:45
Updated : 2010-03-30 15:45
Korea and the European Union are aiming to reach an agreement on the remaining thorny issues in their free-trade agreement talks, intent to seal the deal on the sidelines of the G20 summit in London soon, Korean officials said yesterday.
Trade Minister Kim Jong-hoon and his EU counterpart Catherine Ashton hope to find common ground on the sensitive issues of duty drawback and rules of origin, the officials said.
The chief FTA negotiators on both sides led the eighth and final round of official talks in Seoul from March 23 to 24, succeeding in drawing up a provisional accord and leaving the more sticky issues to be resolved at the higher trade-minister level.
Seoul is requesting duty drawbacks, which allow the government to return import tariffs to Korean companies that use imported materials to make products for exports. Brussels has not accepted the duty drawback measures under existing FTAs with Mexico and Chile.
Rules of origin are also of a sensitive nature for a country like Korea, which relies heavily on imported raw materials to manufacture goods. Experts say Seoul is seeking for 40 percent of the final produced good to be made from imported raw materials in order to be considered "made in Korea." The EU, however, is asking for 50 percent, they say.
Ratification of the accord is expected to expand Korea`s exports by $11 billion and gross domestic product by 3.08 percent, according to a forecast by the Korea Institute for International Economic Policy.
As of 2008, Asia`s fourth-largest economy posted a $23 billion trade surplus with the EU. Bilateral trade between Korea and the EU reached $98.4 billion last year.
Korea shipped $54 billion worth of goods, while it received $40 billion of goods from the EU.
By Yoo Soh-jung