By Choi He-suk
Local economics organizations praised the National Assembly ratification of the Korea-EU Free Trade Agreement on Wednesday.
The EU is Korea’s second largest export destination, and European goods account for the fourth largest proportion of Korea’s imports.
As such, the pact is projected to have significant benefits for Korea’s economy with some projecting that it will have a larger effect than the pact with the United States.
According to estimates from the Samsung Economic Research Institute, the pact with the EU will push up Korea’s GDP by 1.02 percent, while that with the U.S. will increase it by 0.56 percent.
The pact’s ratification was followed by series of Korea-based economic organizations welcoming the development.
“The Korea International Trade Association welcomes the National Assembly’s passing of the Korea-EU FTA,” KITA said in a statement.
“In particular, considering the content of the agreement, the Korea-EU FTA will make significant contributions towards achieving $1 trillion trade volume,” KITA said.
According to KITA, following the implementation of the pact on July 1, trade with countries that have free trade agreements with Korea will account for 25 percent of Korea’s trade. At present, the figure stands at 15 percent.
Along with KITA, the European Union Chamber of Commerce in Korea also released a statement praising the developments.
Saying that the organization believes that the pact will “bring about an unparalleled series of tariff liberalization and dismantling of technical barriers to trade,” the EUCCK added that its implementation will lead to “extensive and comprehensive access to the Korean marketplace and vice versa.”
The EUCCK also said that the long-term benefits of free trade will outweigh any potential short term concerns, and that the agreement will open up new trade opportunities in goods and services worth 19.1 billion euros ($28.3 billion) for the EU and 12.8 billion euros for Korea.
The EUCCK added that the implementation of the pact will remove 1.1 billion euros worth of tariffs placed on Korean goods, and that European exports’ tariffs will be cut by 1.6 billion euros.
Chronology of the Korea-EU Free Trade Agreement
• May 4, 2011 National Assembly ratifies the Korea-EU FTA
• Oct. 6, 2010 Korea and EU sign the Korea-EU FTA
• Oct. 15, 2009 The Korea-EU FTA initialed
• May 7~11, 2007 to March 23~24, 2009 Eight rounds of negotiations are held in Seoul and Brussels
• May 6, 2007 Korea and EU agree to launch the Korea-EU FTA negotiations