EU–South Korea free trade agreement

SUMMARY OF:

Free Trade Agreement between the EU and the EU Member States, of the one part, and South Korea, of the other part

Decision 2011/265/EU – signing and provisionally applying the Free Trade Agreement between the EU and the EU Member States, of the one part, and South Korea, of the other

Decision (EU) 2015/2169 – conclusion of the Free Trade Agreement between the EU and the EU Member States, of the one part, and South Korea, of the other

WHAT IS THE AIM OF THE AGREEMENT AND OF THE DECISIONS?

The agreement establishes a free trade area between the European Union (EU) and the Member States, on the one hand, and South Korea, on the other. Under the Free Trade Agreement (FTA), the partners aim to progressively eliminate or reduce duties and import quotas on imports and exports of industrial goods and on agricultural and fisheries products.
The FTA also introduces the progressive liberalisation of trade in services between the partners and facilitates trade in a number of other areas.
The decisions mark the signing, on behalf of the EU, of the FTA with South Korea (Decision 2011/265/EU) and its conclusion (Decision (EU) 2015/2169).

KEY POINTS

Objectives

The main objectives of the FTA are to:

eliminate duties for EU exporters of industrial and agricultural products;
improve market access for EU service providers;
abolish non-tariff barriers (i.e. barriers other than tariffs such as quotas or technical standards), in particular in the electronics, pharmaceuticals and medical devices sectors;
improve market access for EU car manufacturers;
further liberalise government procurement (i.e. ensuring that EU and South Korean suppliers can compete on equal terms in one another’s government purchasing markets);
protect intellectual property rights;
promote competition;
improve transparency;
integrate sustainable development within the trade relationship;
establish a rapid and effective dispute settlement system.

Elimination of tariff and non-tariff measures

The EU and South Korea agree to progressively abolish customs duties applying to their trade in goods (within 5 years of the FTA’s entry into force). This liberalisation applies to over 98% of goods (listed in Annex 2-A).
There are longer transition periods (7 years or more) for the elimination of duties for certain sensitive farm or fishery products.
In certain circumstances, one party may apply bilateral safeguard measures where an increase in imports causes or threatens to cause serious damage (e.g. loss of market share or reduced prices) to the relevant sector in its own economy.
On technical barriers to trade, the EU and South Korea agree to cooperate on standards and regulations, opening discussions when appropriate.
Sanitary and phytosanitary measures may be introduced to protect human, animal or plant life or health. However, the partners agree to minimise the effects of these measures on the development of trade.

Trade in services, establishment and e-commerce

The partners agree to liberalise part of their offer of services in accordance with the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS). They have therefore drawn up a list of commitments and limitations (Annex 7-A) concerning the liberalised service sectors.
The agreement defines the rules on the right of establishment for access to the market in services, and on the right of residence for professionals.
The partners recognise that e-commerce contributes to economic growth and that barriers to its use and development must be avoided. However, its development must be fully compatible with international data protection standards.
The parties agree to open their financial services sectors to one another.

Government procurement

The EU and South Korea agree to give each other access to their markets in products and services, in compliance with the rules on openness, transparency and non-discrimination in the WTO’s Agreement on Government Procurement.
The rules applying to public works contracts are laid down in Annex 9 to the agreement.

Intellectual property

This chapter includes the parties’ commitments with regard to intellectual property rights, and in particular trademarks, copyright, designs and geographical indications. These complement and update the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights. The chapter also includes a section on enforcement of intellectual property rights based on the EU’s internal rules contained in the enforcement directive.

Dispute settlement

In the event of non-compliance with the FTA, there is a dispute settlement mechanism similar to that of the WTO. The FTA dispute settlement involves consultation and arbitration, and there is a mediation mechanism.

Sustainable development

The EU and South Korea are committed to implementing the conventions and standards of the International Labour Organization ratified by the parties, along with the multilateral environmental agreements they have signed.
The partners agree to set up institutional structures to implement and monitor their joint commitments and mechanisms for cooperation on trade and sustainable development.

Evaluation process

In 2016, the European Commission commissioned the evaluation of the implementation of the EU–Republic of Korea FTA. Experience in implementing this FTA may, in the future, serve as a basis for improving the design of similar agreements being negotiated with other countries.

DATE OF ENTRY INTO FORCE

The FTA has been provisionally applied since July 2011 and formally entered into force on 13 December 2015.

BACKGROUND

According to a 2010 study, this agreement should allow bilateral trade to double over the next 20 years compared to a situation without an agreement in place.
For more information, see:
- The EU and the Republic of Korea (European Commission),
- EU–South Korea Free Trade Agreement (European Commission).

MAIN DOCUMENTS

Free trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part (OJ L 127, 14.5.2011, pp. 6–1343).

Successive amendments to the agreement have been incorporated into the original text. This consolidated version is of documentary value only.

Council Decision 2011/265/EU of 16 September 2010 on the signing, on behalf of the European Union, and provisional application of the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part (OJ L 127, 14.5.2011, pp. 1–3).

Council Decision (EU) 2015/2169 of 1 October 2015 on the conclusion of the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part (OJ L 307, 25.11.2015, pp. 2–4).

See consolidated version.