agreement eliminates all tariffs on imports, as well as many non-tariff barriers to trade between the European and South Korean companies. Within five years 99% of bilateral trade will be exempt from duties and taxes. It is expected that the agreement will come into force during the second half of 2010 after its approval by the parliaments.
This agreement is especially important in the current economic climate. It will help to combat the recession and will create new jobs, - said EU Trade Commissioner Catherine Ashton, who signed the document with the EU. Agreement with South Korea was the largest in the history of the EU treaty in the field of free trade with a third party.
volume of bilateral trade in goods between the EU and South Korea in 2008 amounted to approximately EUR65 billion, with the obvious trade deficit with the EU. But experts say that the Korean market has significant growth potential for European companies. The agreement with Korea would bring about EUR32 billion and received from the new trade in goods and services, with the abolition of Korea's import restrictions on the amount of EUR1, 6 billion in European and fees in the amount of EUR1, 1 billion to exporters from the 27 states of the European Union agreement opens new market products of approximately EUR19 billion for South Korean companies - to EUR12 billion
Gains from Trade Agreement will have such European companies as a manufacturer of medicines British GlaxoSmithKleine, Germany chemicals manufacturer BASF, electronics manufacturers, in particular, the Netherlands Royal Philips Electronics, and agricultural producers. Shipbuilders and financial companies also benefit from the agreement between the EU and South Korea.
opposed the Treaty of European automakers, who contended that it gives unfair advantage to Korean Hyundai Motor and Kia Motor. The agreement in stages, over three to five years, abolishing the 10% tariff on Korean cars and 8%-ing a toll on European cars. There will also be eliminated red tape with a double passage of the tests for safety and environmental cars.
the EU in 2008, Korea imported 450 thousand cars in its market, where only sold 15 million vehicles, whereas Europeans are exported to South Korea only 33 thousand cars, while at the South Korean market are sold every year around 1 million vehicles. The agreement provides a tremendous competitive opportunities to South Korean manufacturers, - says Ivan Hodak, Secretary General of the European Automobile Industry Association.
Catherine Ashton yielded two requirements Korea, which was considered unacceptable by the representatives of industry in the EU. The first assignment softens EU rules of origin of products and increases the permissible limits of foreign components in the Korean cars from 40% to 45%. The second allows Korea to continue financial assistance to their producers and charges for the imported components of the products exported to the EU.
The South Korean government welcomed the agreement with the EU and stated that the Korean manufacturers of automobiles, electronics and textiles will benefit from it. Analysts agree with this statement. The agreement will help promote South Korean exports, because the EU - the second largest market for Korean exporters, - said Lee Wook of Seoul Development Institute of Korea. According to him, South Korea, being the fourth largest EU trading partner after the United States, Japan and China, will be able to gain access to advanced European technologies.
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