BRUSSELS: The European Parliament on Thursday gave its consent to the EU-South Korea free trade agreement, the most ambitious deal the EU has ever negotiated.
The Parliament approved the agreement after pushing through a strong safeguard clause to protect European industry and receiving guarantees that the new Korean legislation on car CO2 emission limits would not be detrimental to European automakers.
The deal was passed following 465 votes for, 128 against and 19 abstentions that ended two and a half years of negotiations. The agreement will come into effect in July 2011.
"With the safeguard clause built in, this deal is very good news for European industry. We have opened our markets to cheaper products that will benefit consumers and Korea has opened its markets to our exporters, who will benefit from significant extra demand," said Robert Sturdy, a Member of the European Parliament (MEP).
The deal was designed to eliminate approximately 98 percent of import duties and other barriers in manufactured goods, agricultural products and services over the next five years.
In addition, the free trade agreement (FTA) is expected to create new trade in goods and services worth €19.1 billion ($25.9 billion) for the EU and save EU exporters €1.6 billion ($2.1 billion) a year.
It also covers trade-related activities such as government procurement, intellectual property rights, labor standards and environmental issues. The EU expects that the deal will double its trade with Korea in the medium term, thus boosting jobs and growth.
On February 7, the Parliament's International Trade Committee recommended ratifying the deal. 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.
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. The electronic equipment and textile industries will also benefit from the FTA.
The Parliament also approved a safeguard clause by 495 votes to 16 with 75 abstentions. This clause will allow the EU to suspend further reductions in customs duties or increase them to previous levels to prevent harming EU producers.
(BNO NEWS )