On the first of July 2011 the new EU-Korea Trade Agreement (FTA) came into effect for goods released to free circulation. The official text states this agreement consists of 15 Chapters, 3 protocols, several annexes and appendixes and four understandings. Don’t we just love the official legal talk – but how does this translate into benefits for international trade companies?
Simple. It will relieve EU exporters of industrial and agricultural goods to Korea from paying tariffs. As always with Trade Agreements, eligibility rules apply.
The European Commission estimates that exporters will save €1.6 billion annually – a phenomenal amount of savings to be had in the current economic climate. In addition to current trade levels, research carried out highlighted that new trade in goods and services is expected to increase as a result of the FTA by a further €19 billion and will most likely derive from the opening of market sectors such as financial, legal, telecommunications and freight.
The agreement will also bring other benefits for the EU, such as increased improved market access for EU car manufacturers, tackling non-tariff barriers in certain sectors including pharmaceutical and medical devices, enhanced access to government procurement, strong competition rules, protection of intellectual property rights, a commitment on transparency and sustainable development and effective and fast dispute settlement.
I am sure it will be a while before all these benefits are firmly imbedded in all trade activities, but what a fantastic opportunities for companies in the European Union to find out more about South Korea as a potential new trading partner.
I am sure that the international business support network will stage events related to ‘Trading with South Korea in the forthcoming year, so please look out on our ‘What’s On’ page for an event in this region.
My friend in South Korea equally reports that South Korean companies are eager to increase trade with the EU.
To find out more about the aforementioned eligibility criteria, HMRC has published a 24 page leaflet entitled ‘Tariff Preference – a guide to the EU’s new reciprocal trade agreement with South Korea’ and can be found on www.hmrc.gov.uk