Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-02-10-Speech-3-668"
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"en.20100210.34.3-668"2
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"Madam President, I would like to thank the honourable Members for their oral question, which confirms the interest of the European Parliament in the EU-South Korea free trade agreement.
According to one study, the FTA will create substantial new trade in goods and services of 19.1 billion for the EU compared to 12.8 billion for Korea. Existing studies have not identified any sectors that would be negatively affected by the FTA, but in case of serious injury or threat thereof, the Commission would not hesitate to activate the safeguard procedures built into the agreement. Let me also remind you that, in the event of such a necessity, we have the possibility of employing the support measures under the European Globalisation Adjustment Fund.
With regard to intellectual property rights, the FTA contains ambitious commitments going beyond WTO rules. Besides, the Commission has been careful to ensure that no element in the FTA contradicts the EU
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On the implications of the protocol on cultural cooperation, the FTA would set a framework for engaging in policy dialogue on cooperating and facilitating exchanges regarding cultural activities. It is, above all, a demonstration of the EU’s commitment to actively promoting the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expression.
On rules of origin, the negotiations with South Korea resulted in a number of changes which are consistent with the ongoing process of reform of such rules. These changes go in the direction of simplification, thus implementing a specific request by the European Parliament. At the same time, strict rules have been maintained for all sensitive sectors.
The Commission has paid particular attention to creating a new market-access opportunity in Korea for European fruit and vegetables. In order to encourage Korea to open up its market, European Union entry prices have been eliminated except in the case of the three most sensitive products: tomatoes, oranges and Korean citrus.
Obviously, the FTA also opens the EU market to Korean products. To protect our industry against import increases causing or threatening injury, the FTA contains an effective safeguard mechanism.
This safeguard clause can be invoked from the entry into force of the FTA. The Commission will monitor the EU market and Korean imports to assess the need to invoke the safeguard clause, and remains committed to making use of it if conditions are met.
The same applies to the special clause on duty drawback, which can be invoked based on publicly available trade statistics on imports into and exports from Korea.
I am aware of certain concerns expressed, notably by the EU car industry, about the duty drawback provisions in the FTA, but I have to emphasise that duty drawback is currently allowed and used by Koreans as well as by EU exporters. Thus, maintaining it in the FTA does not accrue any new benefit. The current economic impact of duty drawback is very small, about one eighth of the value of the Korean duty concessions.
In the case of cars, available studies show that, on average, the foreign content of Korean cars is between 10% and 15%. If foreign sourcing were to increase significantly, the special clause on duty drawback would provide for an effective remedy.
As this will be the first major trade agreement to which the European Parliament will be asked to give its formal consent under the Lisbon Treaty, I very much welcome this opportunity to reply to the many aspects of the free trade agreement raised in the oral question. I might not be able to give detailed replies to all aspects of the question, but I am happy to address them in a possible follow-up question.
It cannot be ruled out that implementation of the FTA may give rise to different views and interpretation between the parties. To address such situations, the FTA contains an efficient and rapid dispute settlement mechanism. The Commission will monitor closely the implementation of commitments by Korea and will not hesitate to invoke dispute settlement procedures if warranted.
The FTA would also break new ground in promoting the protection of the environment and respect for labour rights, containing comprehensive commitments on a range of social and environmental standards. The scope of these commitments is broader than that of any comparable agreement. To ensure that these commitments are respected, the FTA establishes a strong framework for monitoring their implementation, involving civil society, business, trade unions and NGOs.
Finally, I would like to inform you that Korea and the EU have been discussing possible adjustments to the tariff dismantlement schedule. These adjustments would imply
that products classified under three years and five years would be subject to four- and six-year tariff cuts respectively, so that duties would be eliminated one year later than originally scheduled.
While this implies a modest sacrifice in terms of our offensive interests, we thought that such an adjustment would be appropriate, taking into account the sensitivities of certain sectors. Korea has indicated its readiness to agree to those changes on the basis that the sensitivities of both sides are equally respected.
The EU-South Korea agreement is not only the first FTA negotiated by the EU with a country in Asia; it is also the most ambitious and comprehensive free trade agreement ever negotiated by the European Union. After more than two years of negotiations, the free trade agreement was initialled on 15 October last year.
Throughout the negotiating process, the Commission remained in close contact with Parliament. In this respect, the Commission welcomes the resolution on Korea voted by Parliament in December 2007. Many of the issues raised in this resolution have been addressed in the free trade agreement.
The whole process was also accompanied by a constant dialogue with civil society and a comprehensive trade sustainable impact assessment. The FTA is currently being translated. By the end of March, the Commission envisages presenting to the Council the decisions to authorise the signature of the FTA as well as to conclude the FTA. The objective is to sign the agreement in April.
The Commission is currently completing its analysis as to whether the agreement also falls within the competence of Member States. In this case, the FTA would require the ratification of all Member States before formally entering into force. As this process may take some time, it may be necessary for the Commission to propose that the agreement be provisionally applied pending its entry into force. The provisional application is decided by the Council on a proposal by the Commission.
The Commission is sensitive to the desire of Parliament to be able to give its views on the FTA before it is provisionally applied. The Commission will continue to seek out the best means, together with the Council and Parliament, to ensure that this takes place in a manner that does not cause unnecessary delays. It is of great importance that we apply the agreement as soon as is feasible.
As regards the regulation on safeguards, the Commission intends to present its proposal for such a regulation to the Council and the European Parliament in the coming weeks, and hopes that it will be possible to adopt this legislation rapidly so as to ensure that its application takes place as close as possible to the application of the FTA.
The economic benefits of the FTA are mostly in the EU’s favour. It will relieve EU exporters of industrial and agricultural goods from Korean tariffs, saving them EUR 1.6 billion in duties annually, half of these directly from the day of the entry into force of the agreement. Obviously, potential gains from these duty savings will be even higher, as trade between the EU and Korea is expected to expand over time."@en1
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