Following the signing of the deal last week EU Trade Commissioner Karel De Gucht described it as a “deep and innovative trade agreement – the EU’s most ambitious to date and the first with an Asian country. This is a landmark agreement and a benchmark for what we want to achieve with other key trading partners.”
Benefits to EU food and drink industry
The FTA will bring to an end almost all tariffs between the two economies, leading to duty free access for a large majority of European food and drink products. This is in contrast to just 2 per cent of EU food exports entering South Korea duty free prior to the agreement.
Greater protection is given to more than 160 commercially important European Geographical Indications (GIs) which the umbrella trade association for the food and drink industry, the CIAA, believes will help keep the South Korean market free from counterfeit products, “setting a clear precedent to future FTAs to be concluded by the EU.”
Any delay could result in EU manufacturers losing out to preferential treatment already obtained by third countries.
With food and drink the largest manufacturing sector in the EU in terms of turnover (€965 billion, 12.9 per cent of the manufacturing sector) and employment (4.4 million people, 13.5 per cent of the manufacturing sector) , CIAA members expect the FTA to bring considerable gains to the industry and Europe as a whole.
South Korea is one of the most promising trading markets for EU food and drink products. In 2007, EU food exports to the region topped €1.1 billion and the country ranked 10th in the most important export destinations for EU food and drink – a 49 per cent increase on 2000.
Despite suffering a set back as a result of recent economic conditions – South Korea fell to 13th position in the export ranking in 2009, with a value of €829 million – partial data now available to the CIAA shows clear signs of recovery.
The UK is the largest member exporter, followed by France, Netherlands, Germany, Spain and Italy respectively.