BRUSSELS: The European Parliament (EP) International Trade Committee on Monday recommended that Parliament give the green light to ratification of the trade agreement with South Korea, which is the most ambitious the European Union (EU) has ever negotiated.
Beforehand, however, Members of the EP (MEPs) pushed through a strong safeguard clause to protect European industry from excessive imports and received guarantees from Seoul that the new Korean legislation on car CO2 emission limits would not be detrimental to European car makers.
The EU's long-awaited free trade agreement (FTA) with South Korea aims to eliminate about 98 percent of import duties and other trade barriers in manufactured goods, agricultural products and services over the next five years and to double the EU's trade with Korea in the medium term, thus boosting jobs and growth.
It would also cover trade-related activities such as government procurement, intellectual property rights, labor standards and environmental issues.
On January 26, the ratification of the FTA moved a step closer after the International Trade Committee backed the final compromise on the safeguard measures that MEPs had agreed with Council in mid-December 2010.
These measures would allow the EU to suspend further reductions in customs duties or increase them to previous levels, if lower rates lead to an excessive increase in imports from South Korea, causing or threatening to cause "serious injury" to EU producers.
However, the committee postponed the vote on the FTA itself to February 7 to allow more time to check new Korean legislation that requires tougher limits on car CO2 emissions and fuel efficiency.
After review, a clear majority of the committee members (21 to 4) voted on Monday in favor of ratifying the FTA, which is expected to create new trade in goods and services worth €1.9 billion ($2.58 billion)for the EU and save EU exporters €1.6 billion ($2.17 billion) a year.
The main gains are expected in the small and medium-sized car, consumer electronics and textiles industries.
Under the agreement, the 8 percent tariff on EU cars exported to Korea will be removed, which means that for every car worth €25,000 ($34,000) exported to Korea, €2,000 ($2,700) in duties will be saved.
In addition, EU car makers will be able to sell in Korea cars that have been produced in accordance with EU specifications without being subject to additional testing nor having to bear related costs.
Both the report on the safeguard clause and the report on the FTA itself are expected to be endorsed by the whole Parliament at its plenary session in mid-February in Strasbourg.
The EU-South Korea free trade agreement and the safeguard regulation are both due to come into force in July 2011.
(BNO NEWS )