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South Korea, EU narrow differences over free trade

(Agencies)
Updated: 2009-01-21 08:58

SEOUL, South Korea -- South Korea and European Union said Tuesday they have narrowed differences standing in the way of a free trade agreement, but that another round of negotiations was needed.

South Korean Trade Minister Kim Jong-Hoon (L) offers EU Trade Commissioner Catherine Ashton (R) a chair during their meeting in Seoul on January 19. South Korea and the European Union have made significant progress in negotiations on a free trade agreement, ministers from the two sides said Tuesday. [Agencies]

"We have made significant progress," EU Trade Commissioner Catherine Ashton said at a joint news conference with her South Korean counterpart Kim Jong-hoon. Kim said that the two sides had "confirmed that we narrowed the gap on the major issues and reached a considerable level of consensus."

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The trade chiefs spoke after two days of ministerial-level talks focused on five areas, including tariffs and non-tariff measures in automobile trade, according to Kim. Seven rounds of formal negotiations at the chief negotiator level since May 2007 have failed to yield an agreement.

"We have issues to be addressed that are inevitably complex and complicated," Ashton said without elaborating. Kim also refrained from providing details on matters that were discussed other than to say that the two sides were finding it difficult to resolve a complex issue related to import taxation.

Still, both sides said another round of negotiations was set for early March.

"I expect that the March negotiation will be the last round and I hope that Madam Ashton shares this expectation," Kim said in answering a reporter's question. Ashton did not have an opportunity to respond to the same query.

Trade between South Korea and the EU reached $93 billion in 2007, the last year for which annual figures are available.

The EU is South Korea's second-largest trading partner after China, while South Korea is the EU's fourth-largest, according to Seoul. The EU is the largest foreign investor in South Korea.

Automobile trade, which strongly favors South Korea, has been a contentious issue.

South Koreans bought 32,756 vehicles from EU member states last year, according to the Korea Automobile Importers & Distributors Association, more than from Japan and the United States.

South Korea exported more than 623,000 vehicles to the 27-member EU in 2007, the last year for which figures were available, according to data provided by the Korea Automobile Manufacturing Association.

There is no particular deadline for reaching a free trade agreement, though both sides have expressed interest in wrapping up a deal as soon as possible.

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