European Union and S. Korea sign major free trade deal

The European Union and South Korea sealed a vast free trade agreement yesterday, the first in a series of bilateral pacts which Europe hopes to strike with Asian nations.

The deal was signed at a ceremony in Brussels by South Korean and European trade chiefs under the eyes of President Lee Myung-bak and the EU’s top two officials, Jose Manuel Barroso and Herman Van Rompuy.

The agreement was signed after EU nations persuaded Italy last month to ditch objections over fears for its big auto industry.

At the time, Belgian Foreign Minister Steven Vanackere, whose country holds the EU’s rotating presidency, called the deal the “most ambitious agreement ever” for the 27-nation bloc.

Rome secured a six-month delay in the implementation of the FTA to July 1, 2011, in order to prepare its auto industry for the tariff changes.

The agreement requires the 27-nation EU and South Korea to eliminate 98.7 per cent of duties for both industry and agriculture within five years and to eliminate remaining tariffs almost fully over longer periods.

EU states insisted on a “safeguard” clause to protect the auto industry from “sudden surges of imports” in sensitive sectors, including small cars.