EU Carmakers Oppose South Korea Free Trade Talks

Feb. 5, 2009
Says agreement could further weaken the competitiveness of the European economy

On Feb. 5 the ACEA car makers association called a halt in EU negotiations with South Korea for a free trade agreement, warning Europe was giving too many concessions.

"The EU must refrain from entering into unbalanced trade agreements that further weaken the competitiveness of the European economy and this is especially true in times of economic turmoil," ACEA secretary general Ivan Hodac said.

In particular, European carmakers called for tariffs on South Korean car imports to be dismantled over seven years rather than a proposed five. In the deal under negotiation, South Korea would dismantle its tariffs in the categories interesting European car makers over three years.

ACEA also said that Seoul should be forced to apply international technical standards for imports instead of stricter domestic rules, which they claim currently act as a barrier to trade.

South Korea currently exports 600,000 vehicles to Europe annually while the EU exports only 22,000 to the Asian country.

In reaction to ACEA's call, European Commission spokesman Peter Power stressed that a free trade agreement would yield "substantial market access opportunities for a wide range of European industries."

"In addition an agreement would see the elimination of many of the 'behind the border barriers' such as burdensome regulations that currently impede the sale of European goods, especially cars, in Korea," he added.

South Korea and the EU reported last month that they had made significant progress in negotiations on a free trade agreement, with the next round of formal talks due in Seoul in early March. Trade between the 27-nation EU and South Korea has grown on average 11% over the period from 2003 to 2007, making the country the fourth biggest trade partner outside Europe.

Copyright Agence France-Presse, 2009

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