S Korea and EU start trade talks
Seoul aims to be free trade hub linking Asia to Europe and the US.
“[Bilateral FTAs] add to the sum total of world trade and they reach into areas and to heights of trade opening that cannot be achieved in the current round of multilateral talks”
Peter Mandelson, EU trade commissioner
South Korea and the EU launched official negotiations in Seoul on Monday although discussions have been going on since 2003.
South Korea hopes the deal with boost exports of cars, microchips, electronic goods and textiles to the European market.
Last month, it concluded a landmark agreement with the US to cut tariffs and other trade barriers, sparking off mass protests in Seoul by thousands of trade unions and farmers’ groups.
Peter Mandelson, the EU trade commissioner, said bilateral free trade agreements will help to fill key gaps in a multilateral deal under the World Trade Organisation.
“They add to the sum total of world trade and they reach into areas and to heights of trade opening that cannot be achieved in the current round of multilateral talks,” he said.
Both sides will wrap up the first round on Friday but are expected to shuttle between Seoul and Brussels for four or five more rounds this year.
The EU is the biggest single foreign investor in South Korea with an investment of almost $5bn last year.
It was the country’s second biggest trading partner after China last year, with trade reaching close to $79bn.
Apart from the FTA with the US last month, which needs ratification in both countries’ legislatures, South Korea has signed FTAs with Chile and Singapore.
An agreement with the Association of South-East Asian Nations, excluding Thailand, will take effect on June 1.
South Korea is also reportedly exploring free trade deals with Canada and China.