Intensified trade and economic relations with South Korea

Parliament's rapporteur David Martin (PES, UK, Labour, Scotland) said: "Korea is a significant player in the region in Asia. It is now a wealthy country, the eleventh largest economy in the world. Its per capita income is comparable to Spain. It is an economy that is growing quickly and trade between our two regions – between Korea and the European Union – reached 60 billion euros last year. So it is a deal worth doing and if we can get it right I think it is a win-win situation. Korean manufacturing industry, for example, can win through access to European services, enabling Korean manufacturing to expand and to compete more favourably. We can win through access to the Korean market for some of our key goods and services."

 

The report considers that the size and rapid growth of the Southern Korean economy makes it a suitable candidate for a bilateral agreement. Korea has signed Free Trade Agreements (FTAs) with the United States and a number of other leading trading partners and has further agreements under negotiation. The report reaffirms that a successful conclusion of the DDA remains a priority for MEPs.

 

On the scope of this FTA, the House believes that an agreement limited to tariff reductions would merely produce short term benefits. Any FTA with South Korea should take account of the four so-called Singapore Issues (foreign investment, competition, transparency in public procurement and trade facilitation).

 

 

On market access, the report considers that South Korea’s divergence from international norms and labelling requirements constitute major NTBs which present particular problems for the automotive, pharmaceutical, cosmetics and electronics industries.

 

On the TRIPs issue, the House supports the Commission’s objective of assisting EU exporters of pharmaceutical products and medical devices by ensuring greater transparency in the Korean healthcare system. The future Agreement should not create any legal or practical obstacles to Korean firms using the flexibilities set out in paragraphs 4 and 5 of the declaration on the TRIPs agreement and public health.

 

MEPs are concerned that that the EU-SouthKorea FTA could have a severe negative impact on the European automotive industry; requests therefore that the Commission considers a strategy of phasing out EU import tariffs with safeguards.

 

In the light of the EU's problematic experiences with the Korean shipbuilding industry, special attention should be given to this sector in the negotiations, says the report.

 

On intellectual property, the report attaches high priority to the effective enforcement of intellectual property rights, including through the introduction of adequate penalties for counterfeiting and piracy, especially in sound recordings.

 

The report recommends that the Commission seriously examines the extent to which trade relations between North and South Korea affect a FTA with the EU.

 

 

The House welcomes the role of the Kaesong Industrial Complex in contributing to regional peace and security; nevertheless believes that the inclusion of goods from the Kaesong Industrial Complex (KIC) in an FTA raises legal and technical problems.

 

 

The report states that it wants Parliament closely involved in each stage of the negotiations and be given the chance to express its view on the acceptability of the negotiated text. It therefore expects the Commission and the Council to seek to present the agreement in a form that would require the assent of the Parliament.