Seoul, July 13: South Korea and the European Union have reached agreement on a free trade pact after more than two years of negotiations, the government in Seoul said Monday.
President Lee Myung Bak expressed confidence that the conclusion of the trade talks could be announced after his meeting with the Swedish premier later in the day.
Lee made the remarks in his regular radio address to the country while finishing up a visit to Sweden, which took over the rotating EU presidency July 1.
The completion of the trade agreement is to be confirmed during his meeting with Prime Minister Fredrik Reinfeldt, said Lee, who added that he was in Europe to bring the trade negotiations to a conclusion and attend the Group of Eight summit last week in Italy.
Lee said the trade pact would lead to a landmark change in South Korea’s relations with the European Union and he hoped the agreement would have a positive impact on the trade talks his administration is conducting with other governments.
South Korea is also negotiating trade deals with the United States and India which, if concluded, would lead to South Korea enjoying free trade with half the world’s population.
The biggest obstacle with the EU was refunds of so-called duty drawbacks for certain South Korean products. Those are taxes paid on imported parts used to manufacture final products, such as cars, that are then reimbursed when that final product is exported.
The trade talks began in May 2007, a few months after Seoul and Washington wrapped up their trade negotiations. Ratification of the US pact has been held up since then on opposition from US President Barack Obama’s Democratic Party.
The European Union is South Korea’s second-largest trading partner after China and its biggest investor.
The trading volume between the union and Asia’s fourth-largest economy was 98.4 billion dollars last year.
——Agencies