just-auto.com

BELGIUM: ACEA criticises proposed EU-South Korea FTA

By just-auto.com editorial team | 4 November 2008

European carmakers are protesting about the terms of a prospective free trade agreement (FTA) with South Korea, labelling it as 'highly unbalanced' and 'one-sided'.

The negotiations between the European Commission and South Korea have resumed this week and are entering into their final phase.

The European carmakers' trade association ACEA says the prospective deal does not respect the basic principle of mutual benefit, offering a disproportionate competitive advantage to the Korean auto industry when exporting to the EU.

Moreover, ACEA says an unbalanced outcome will be at the expense of the automotive manufacturing in the EU. There would, furthermore, be severe implications for upcoming negotiations with other Asian countries, setting a precedent for more one-sided, harmful trade agreements, the trade association argues.

The European manufacturers say they want 'clear and unconditional market access to South Korea, in return for dismantling the EU tariffs as suggested by the Commission'. 

"There is a huge imbalance in trade between the EU and South Korea that has a fully export-oriented automotive industry, with the EU being its main target", said Ivan Hodac, Secretary General of the European Automobile Manufacturers' Association ACEA. 

EU exports are limited to around 25,000 vehicles per year to a market of more than 1.1 million new vehicles annually. Currently, South Korea annually exports 700,000 vehicles to EU and this number is expected to increase significantly.

"We have repeatedly asked the Commission to launch an impact assessment on the consequences of a future FTA with South Korea, but without a proper reply."

Concerning the more technical elements of the FTA, ACEA says: