Korea-EU FTA - Implications for Global Businesses - - Implications for Global Businesses Korea-EU FTA - Implications for Global Businesses - - Implications for Global Businesses Ministry of Foreign Affairs and Trade The Republic of Korea United Kingdom

I. Korean Economy and Trade  Past and Present of the Korean Economy  Importance of Trade in the Korean Economy  88% of Korea’s GDP comes from trade (2010) GDP Per Capita Income 500 times 240 times

II. Korea’s FTA Policy (1)  Consistent Trade Liberalization policy - based on WTO multilateral system  Policy Environment in 2000’s  Stalemate in the WTO DDA negotiations  Surge of RTAs after the establishment of WTO in 1995  International trade volume under RTAs : more than 50% of the global trade  FTA Roadmap in 2003

II. Korea’s FTA Policy (2)  Korea aims to put trade under FTAs to take up more than 80% of the total trade volume. In ForceConcludedNegotiatingPreparing Chile, Singapore, EFTA, ASEAN, India, EU, Peru USA Australia, Canada, New Zealand, Mexico, Turkey, Colombia, GCC China, Japan, Russia, MERCOSUR

II. Korea’s FTA Policy (3)  Establishment of Global FTA Networks  Securing External Markets  Advancing Domestic Economic System ASEAN MERCOSUR EFTA China Canada Mexico Chile In effect or ConcludedUnder Negotiation Under Preparation USA Mongolia India Japan Colombia New Zealand Peru EU GCC Israel Turkey * The size of the circle proportionate to the size of the market Malaysia Australia Indonesia Singapore Viet Nam Central America

III. the Korea-EU FTA: Background  Strengthening the Strategic Partnership  Korea’s Economic Network with the World’s Largest Market  EU’s Springboard into the Asian Market Progress Launched Concluded Initialed Officially Signed Provisional Application Background  Formal Entry into Force (in 2~3 yrs)  When all 27 Member States of the EU Completes Domestic Ratification Procedures

Main trade partners for Korea and EU (2010)

 “High-Level” Trade Deal  Elimination of Industrial Tariffs IV. Korea-EU FTA: Main Features(1) Staging Category KOREAEU Number of tariff lines (%) Items Number of tariff lines (%) Items Entry into force 90.7 auto parts, TV, refrigerator 97.3 auto parts, air- conditioner 3 years5.1 medium & large- sized cars, 2.1 medium & large-sized cars 5 years3.7 small-sized cars, cosmetics 0.6 small-sized cars, TV 7 years0.5 woolen fabric, plywood - Total100.0

High-Level Trade Deal Korea K-Chile Chile (%) % 41.8% Korea K-ASEAN Asian (%) % Korea K-INDIA India (%) % 3.9% Korea KOREU EU (%) % 94% Korea KORUS US (%) % 81.2%  Tariff Elimination of Goods at the Entry into Force

IV. Korea-EU FTA: Main features(2) Goods Protocols 2. Nat’l Treatment and Market Access for Goods 1. Objectives and General Definition 3. Trade Remedies 4. Technical Barriers for Trade 5. Sanitary and Phytosanitary Measures 6. Customs and Trade Facilitation Protocol Concerning the Definition of ‘Originating Products’ and Methods of Administrative Co-operation Protocol on Mutual Administrative Assistance in Custom Matters Protocol on Cultural Co-operation Rules & Others Services 7. Trade in Services, Establishment and Electronic Commerce 8. Payments and Capital Movements Rules & Others 9. Government Procurement 10. Intellectual Property 11. Competition 12. Transparency 13. Trade and Sustainable Development 14. Dispute Settlement 15. Institutional, General and Final Provisions  “Comprehensive” Trade Deal

V. Korea-EU FTA: Its Implications Tariff Elimination Harmonizing Regulatory Rules Enhancing IPR Rules Substantial Export & Investment Opportunities

 Increase in Korea’s GDP and Welfare  Increase in Employment Implications for the Korean Economy Increase in Real GDP Increase in Welfare For Real GDP Short-term effect Long-term effect SectorShort-term IncreaseLong-term Increase Agriculture-1, Manufacturing4,00033,200 Services27,600219,000 Total29,900253,100

Implications for the EU Economy Report for the European Commission, May 2010 CEPII, Paris; GEP, University of Nottingham; LEAD, Unversité du Sud Toulon-Var  Economic Impacts of the Korea-EU FTA (% change)

Implications for the Korea-EU Trade (2010)

Implications for the Korea-EU Investment 15 (Inbound: EU  Korea, Outbound: Korea  EU)

Implications for the Korea-UK Trade

(2010)

Implications for the Korea-UK Investment (Inbound: UK  Korea, Outbound: Korea  UK)

 Score for the first 100 days  Bilateral trade volume: 25.4 billion US$ = 11.8% increase  The 1 st Trade Committee Meeting: 12 October 2011, Seoul  FTA is not ending point, but starting point  Active participation of Business Community in both Trade and Investment is essential  Cooperation between Government and Business Community is also important VI. Korea-EU FTA: How to make it REAL