The landmark deal, worth an extra £500 million a year for UK firms based on current trading patterns alone, means virtually all tariffs between the EU and Korea will be removed from July 2011. This will result in £1.4 billion of savings in duties per year for EU exporters.
Belgian Foreign Minister Steven Vanackere, EU Commissioner Karel De Gucht and Korean Trade Minister Jong-hoon Kim, today signed the agreement after negotiations began in 2007.
The agreement will result in new opportunities for UK companies in Korea, particularly in legal and financial services, pharmaceuticals, advanced engineering and the low carbon industry, including the renewables sector.
Prime Minister David Cameron said:
“We must put trade absolutely at the heart of the relations that the EU is building with the wider world. The EU-South Korea Free Trade Agreement will be good for Europe and good for Britain.
“It will make a great difference not just in terms of encouraging growth and trade with Korea today, but also in laying the ground for further free trade agreements between Europe and other countries, including India, in the future.”
Business Secretary Vince Cable said:
“I am very pleased by the signing of the FTA at the EU-Korea Summit today. The value of this deal to both nations is considerable and I hope that businesses from both nations will take advantage of the reduction in trade barriers.
“Korea has the Presidency of the G20 this year and I look forward to our countries working together. We are committed to helping advance global open markets and tackling protectionism, which can be delivered first and foremost through the Doha Development Agenda.”
Korean Trade Minister Jong-hoon Kim said:
“The EU-Korea FTA is the most comprehensive and high-quality trade agreement Korea and the EU have ever concluded, which will provide expanded business opportunities for both sides.
“In particular, the EU-Korea FTA is the first FTA the EU has concluded with an Asian country and it will serve as a springboard for British business and industry to advance in the biggest emerging market of the world.”
Notes to editors:
- An online video clip from Trade Policy Minister Edward Davey on the EU-Korea FTA can be found here http://www.youtube.com/watch?v=0PJg4fgo0io
- The FTA will come into force on the 1st of July 2011, subject to the European Parliament giving its assent, and to agreement being reached between the Council of Ministers and the European Parliament on the bilateral safeguard regulation. This regulation implements the provisions agreed between the EU or Korea to take action to address “serious injury” or “threat of serious injury” to domestic industry caused by increased imports arising from tariff elimination under the FTA.
- The FTA is estimated to be worth an additional €19 billion to EU firms and €13 billion to Korean businesses (Copenhagen Economics).
- Companies can find out more about this high-growth market by reading UKTI’s report ‘100 Opportunities for UK Companies in Korea’ at www.ukti.gov.uk/southkorea.
- Due to concerted efforts by the UK and others, Doha featured prominently in the Toronto G20 Communique and the Prime Minister David Cameron chaired a lunch discussion on Doha during the Summit. In the Summit Declaration leaders instructed representatives, using all negotiating avenues, to pursue a balanced and ambitious conclusion to the DDA, and to report on progress at the Seoul G20 summit in November, where leaders will discuss the status of the negotiations and the way forward.
- The Doha Development Agreement if completed will result in an estimated £110 billion to the world economy.
- Korea is Asia’s fourth largest economy with a GDP of around USD$1 trillion - almost the size of the entire Association of Southeast Asian Nations (ASEAN) group.
- In 2009:
Korea was the UK’s 26th largest export market. Two way trades in goods and services totalled £5.6 billion.
The UK was Korea’s 4th largest trading partner within the EU.
Last year, 16.6% (£1.2 billion) of all inward investment into Korea came from UK sources, making the UK the single largest investor in 2009 (Source: Invest Korea).
The UK exported £281 million in financial services to South Korea, £144 million in pharmaceuticals and £148 million in whisky.
- BIS’ online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.
Notes to Editors
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