Korean exports to the European Union are expected to register solid gains once a bilateral free trade agreement takes effect, a local trade organization said Wednesday.
The Korea Trade-Investment Promotion Agency (KOTRA) said a survey of Europe’s 26 largest importers showed they will increase their purchases of Korean products by up to 15 percent once the Korea-EU FTA is enforced.
The trade deal, signed late last year, has been approved by the European Parliament and is only awaiting ratification by Korea’s National Assembly before it can go into effect from July 1 as agreed.
According to KOTRA, one of the industries that will benefit most from the free trade deal is the automobile industry, as the FTA will remove import duties of 2.7 percent to 4.5 percent currently imposed on Korean vehicles and auto parts by individual member nations of the EU.
The combined market share of Korean automakers and auto parts makers in Europe came to 8.45 percent last year, up 72.3 percent from a year earlier.
The figure will likely reach over 10 percent next year, KOTRA said, citing remarks from Christian Wecker, a global program manager at the world’s largest auto parts maker, Bosch, that his company will increase its purchase of Korean products by 5 to 10 percent when import tariffs are removed.
Finance Minister Yoon Jeung-hyun (right) and Korea International Trade Association Chairman SaKong Il (second from left) speak with EU ambassador to Korea Thomas Kozlowski at the FTA Expo in Seoul on Wednesday. (Park Hyun-koo/The Korea Herald)
“Newly emerging markets are becoming more and more important, but the importance of markets in the EU will need to be re-evaluated following the implementation of the Korea-EU FTA,” KOTRA said.
An international trade fair started in Seoul on Wednesday. Hosted by the Finance Ministry, the 2011 FTA Fair will be held for three days until Friday at Seoul’s COEX center, bringing together thousands of officials and people from some 100 organizations and private firms, organizers said.
The fair also comes as the Seoul government moves to put pressure on the country’s parliament to quickly ratify the country’s free trade deals with the United States, signed June 2007, and the European Union (EU), inked late last year.
“For us to achieve the goal of increasing our trade volume to $1 trillion, our exporters must be allowed to fully utilize the country’s FTAs to their fullest extent at the earliest date possible,” said SaKong Il, the head of the Korea International Trade Association.
“We hope this fair will help increase the utilization of FTAs by our firms and also create a favorable atmosphere for early ratification of the Korea-U.S. FTA and the Korea-EU FTA,” he added.