The European carmakers’ association ACEA has called on EU Member States not to ratify a free trade agreement (FTA) that the European Commission has signed today.
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ACEA maintains that the FTA with South Korea consents to unfair competition and goes against the interest of major manufacturing industries in Europe, including the automotive sector, and their millions of employees.
“We call on the EU Member States not to ratify the current text. The concerns that many of them expressed before, and that were echoed by members of the European Parliament, a number of European Commissioners as well as trade unions and businesses, have not been addressed,” commented Ivan Hodac, Secretary General of the automobile industry’s trade association ACEA.
“The Korean negotiators have not only obtained unrestricted access to a market of over 500 million people, the European Commission has in addition allowed South Korea to subsidise exports from its key industries to the EU. This constitutes unfair competition and will lead to economic distortion,” said Hodac.
One major source of concern identified by ACEA is the granting to South Korea of so-called Duty Drawback, allowing Korean manufacturers to reclaim the duties paid on imports from low-cost neighbouring countries such as China even after the elimination of EU customs duties.
“The arrangement on Duty Drawback provides a precedent to other trading partners of the EU, old as well as new ones, to ask for the same benefits. This will cause additional pressure on Europe’s economy,” added Hodac.
ACEA said that the automotive industry supports the EU in seeking ‘trade liberalisation in a fair and balanced way’.
The current agreement with South Korea, however, is not in the interest of Europe’s citizens, it says.
ACEA also notes that in the US, the Obama administration is currently reviewing the signing of their free trade agreement with Korea, because of a number of strong concerns.
“The EU governments have the power and obligation to secure the fair conditions that are lacking in the agreement with Europe. South Korea wants this deal very much and a better outcome is very well possible,” said Hodac.
