With the Korea-EU free trade agreement ratified earlier in the week and set to take effect in July, Korean companies are gearing up for an opportunity to expand their exports to the 27-member European Union. At the top of the list of potential beneficiaries are automakers, television manufacturers and footwear companies, whose products would be exempted from high tariffs.
The EU is set to phase out tariffs on 99 percent of Korean-made industrial products in three years and the remainder in five years. The EU action will be reciprocated by the elimination of tariffs on 96 percent of industrial products of EU origin in three years. It will take up to seven years for Korea to phase out tariffs on some sensitive items.
The Korean government expects shipments of manufactured products bound for EU member nations to increase by an annual average of $2.52 billion and imports of EU-manufactured products an annual average of $2.13 billion during the next 15 years. Of course, there will be losers as well, with EU-made cosmetics, pharmaceuticals, precision machinery and other technically sophisticated products expected to increase their market shares in Korea.
If the Korean-EU free trade agreement is to take full effect, however, the National Assembly will have to take follow-up action to make 11 laws compatible with the pact. The revision bills are now held hostage, with the opposition Democratic Party refusing to take action on them.
What the Democratic Party has been doing with regard to the treaty is truly disappointing. On Wednesday, it boycotted a parliamentary session, reneging on its earlier promise to endorse the treaty. Held responsible was the party’s leadership, which succumbed to the temptation to please opponents of free trade as well as its advocates. What it needs to do is take a stand and help pass all the bills soon.