S Korea, EU sign free trade pact (2)

15:52, October 07, 2010      

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South Korean Trade Minister Kim Jong-Hoon (L) shakes hands with European Commissioner for Trade Karel de Gucht (R) as Belgian Minister for Foreign Affairs, President of the European Ministers Council Steven Vanackere (C) looks on after the signing ceremony of a EU-South Korea Free-Trade Agreement in Brussels, capital of Belgium, Oct. 6, 2010. EU and South Korea signed a free trade agreement Wednesday at the EU-Republic of Korea Summit. (Xinhua/Thierry Monasse)


South Korea and the EU officially launched free trade negotiations in May 2007, with difference over industrial tariffs and auto trade initially hampering progress.

The two sides have held eight rounds of free trade talks, together with several inter-session meetings, for 26 months to narrow the gap in their stances over sensitive issues.

After going through years of struggles, the two sides settled a "provisional" agreement on the bilateral free trade negotiations in late March, reaching a compromise in various points, such as the term to phase out tariffs on industrial goods.

Amid growing expectations on an early settlement, the thorniest issues held back the final agreement for which South Korean Trade Minister Kim Jong-hoon and his EU counterpart, Catherine Ashton, met at a ministerial-level meeting in London.

During the meeting which was held on the sidelines of the G-20 summit, the two ministers discussed over the remaining sensitive issues, such as a duty drawback scheme and rules of origin, which caused the leaders to meet again in Paris later in June.

On the final draft of the agreement, the EU agreed to allow a duty drawback system for South Korean companies, which it does not allow for Chile and Mexico under current free trade agreements, South Korean Deputy Trade Minister Lee Hye-min said.

Concluding the negotiations in July, the two sides initialed the pact in October, seeking to finalize follow-up process in 2010.

The process, however, was halted for a while as the EU's Foreign Affairs Council postponed its decision to sign the deal due to opposition from some member countries such as Italy.

After months of talks, the South Korean side succeeded to convince its counterpart, finally gaining the approval from the council.

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