By Martin Banks - 17th February 2011
More trade is the ultimate answer to our problems
Robert Sturdy
MEPs have approved a free trade agreement (FTA) between the EU and Korea, predicting that it wlll generate “untold benefits” to industries and consumers.
The FTA will see Korean tariffs cut by €850 million immediately when the deal comes into effect in July 2011, rising to €1.6 billion over five years.
It will bring a saving of €40 million for EU spirits producers, and almost completely liberalise trade in agricultural products into Korea, saving EU agricultural exporters €380 million.
Chemical exporters will save €175 million in duties, EU exporters of machineries would save €450 million, whilst the elimination of most duties on the textiles and clothing sector will amount to savings of €60 million.
EU pharmaceutical and medical devices exporters benefit from both strengthened transparency in pricing decisions, and duty elimination- saving around €50 million in duties alone.
The services sector, inducing financial services, telecoms and environmental services, could expect to see a 70 per cent rise in trade volume.
Non-tariff barriers to trade will be broken down, and the FTA includes specific provisions on electronics, motor vehicles and vehicle parts.
Under the Lisbon treaty, all international trade deals must be granted assent by the parliament.
The deal also includes a safeguard clause which would enable the EU to reintroduce “most favoured nation” (MFN) status to areas where it is felt liberalisation was causing serious injury to EU industry.
Parliament in Strasbourg backed the agreement by 465 votes to 128, with 19 abstentions.
After the vote, UK Tory MEP Robert Sturdy, European Conservatives and Reformists group trade spokesman and the MEP who steered the FTA through parliament, said, "This is a monumental deal for the EU and for Korea. Not just for the deal itself, but also as it is the first - and definitely not the last - of its kind.
"The EU is sending a clear signal to the world that we are open for international trade, particularly with emerging economies.
"I hope that the message will go forward to other countries, like India, and build momentum towards other bilateral trade deals.
"We should not give up on a multilateral trade deal through the WTO; but in the meantime we should seek as much trade liberalisation as possible bilaterally.
"In this time of economic difficulty we should never lose sight of the fact that open trade leads to cheaper goods, more and better jobs, and greater competitiveness. More trade is the ultimate answer to our problems and this deal will play an important part in our recovery."
"With the safeguard clause built in, this deal is very good news for European industry.
"We have opened our markets to cheaper products that will benefit consumers and Korea has opened its markets to our exporters who will benefit from significant extra demand."
