South Korea, EU launch free trade negotiations

Seoul, May 6: South Korea and the European Union announced the start of free trade talks on Sunday, hoping to prise open each other markets more and expand their already 80 billion dollars trade.

The start of the talks follows a trade pact agreed only just before a deadline between Asia's third largest economy and the United States and which Seoul reckons will significantly boost its economy over the next few years.

''(A trade deal) will expand opportunities for both sides while giving valuable momentum to liberalisation of global trade,'' Kim Hyun Chong, South Korea's trade minister told a news conference.

He pledged significant changes to tariffs and non-tariff barriers for trade in goods, services as well as in investment and regulatory issues, such as intellectual property rights.

The European Union is South Korea's second largest trading partner after China, while Seoul is the EU's eighth biggest. South Korea has a trade surplus with the bloc of around billion.

EU Trade Commissioner Peter Mandelson, speaking at the same news conference, said Brussels would focus on the auto sector, which is widely seen as heavily protected by South Korea, itself a major car exporter.

Close to 19 per cent of South Korea exports to the EU are vehicles.

''I take pride in every European car which I see on the streets of Seoul but I would like to see a great many more,'' Mandelson said.

The first round of official negotiations will be from May 7-11 in Seoul. South Korean officials have said they hope to wrap up the talks within a year.

Unlike in negotiations with the United States, there is little pressure from Brussels for South Korea to open up its tightly defended agriculture sector. US pressure to open up that market to imports triggered widespread and often violent protests in South Korea.

Last month, the EU estimated its exports could rise by 40 billion euro (.36 billion) a year if the bloc reaches planned new free trade agreements with Asian countries such as South Korea.

Reuters>