The flow of trade between Europe and South Korea in the 11 months since the free trade agreement (FTA) came into force is unbalanced, according to ACEA, the European car makers’ association.
Figures released on 28 June show that between July 1 last year when the FTA became operational and May 31 this year, Korea exported 400,000 domestically-manufactured passenger cars into the EU, a 40% increase from the same period one year earlier. But Korea imported just 73,000 European passenger cars, which represents an increase of 13%.
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ACEA said that this was “a very different picture to that presented by the European Commission”. The EC claimed this week that European car exports to Korea increased by 70%, worth EUR670m (USD842m) in new car sales.
The EC said in a statement to mark the anniversary of the FTA that EU firms had made cash savings of EUR350m in the first nine months of the agreement.
“The successful implementation of the EU-South Korea free trade agreement shows that EU trade policy is on the right track,” said EU trade commissioner Karel De Gucht. “This agreement is already proving its worth as an important step on Europe’s path to economic recovery. This next-generation trade agreement, along with others in the pipeline, is a key part of Europe’s growth strategy.”
The Commission added that EU exports to South Korea increased by 35% to EUR6.7bn compared to the same period in 2007 while exports to other countries grew by only 25%. This, said the EC, demonstrated that the FTA was already having an effect.
But ACEA isn’t convinced. “It is still too early to say if there is a direct relationship between the entry into force of the FTA and the increase in trade flows,” said ACEA secretary general Ivan Hodac. “What is clear however is that European exports are being hampered by the continuing existence of automotive non-tariff barriers (NTBs).”
“On the occasion of this one-year anniversary, ACEA calls on the commission to resolve the issue of existing automotive NTBs as well as to ensure that no new ones are introduced,” Hodac said. “We will continue to actively monitor the situation and remain vigilant to further developments.”
