EU agriculture to benefit from Korean trade talks
In October last year the EU and South Korea initialled a massive free trade agreement, which, if approved, will be the second largest free trade agreement in history, behind the North American Free Trade Agreement (NAFTA). The agreement must now be ratified by all 27 EU member state governments, as well as the European Parliament. I was recently appointed as the parliament’s “rapporteur,” which the person who drafts the parliament’s assent on the agreement.
I wrote a letter to the Commission asking them to clarify what benefits the agreements would have for us, particularly with regards to our agricultural sector. Below is a copy of the response I received:
As the Honourable Member rightly points out, the EU is a strong exporter of agricultural goods into the Korean market with major exports in pork (EUR 240 million per year), whiskey (EUR 176 million) and dairy products (EUR 99 million).
Today, only 2% of EU agricultural exports to Korea enter duty free. The very high Korean tariffs on these goods would be eliminated thanks to the Free Trade Agreement (FTA), and – based on current trade – EU agricultural exporters would globally save EUR 380 million currently paid. Producers of dairy products would save almost EUR 30 million and those of processed vegetables EUR 1.7 million. European wine exports to Korea would be duty free at entry into force of the agreement while whisky exporters would enjoy duty free access within three years.
Besides the duty savings on current exports and as Korean agricultural tariffs are currently very high, trade in the agricultural sector is expected to expand significantly once the FTA is in force. Duty free access for agricultural exports to Korea will support exports by EU farmers and food producers and will thus contribute to safeguarding jobs in the agricultural sector.
In addition to improved market access for agricultural products, the FTA will ensure a high level of protection for well known and commercially important European geographical indications (GIs) in Korea. This is particularly important in the highly competitive Korean market.
Not the least, due to the high Korean tariffs, certain EU agricultural exports would appear particularly vulnerable to displacement by United States (US) products should the US-Korea FTA enter into force before the EU-Korea FTA and reduce tariffs on imports from the US. The EU is currently in a position to see its FTA with Korea become applicable before the US-Korea FTA. In giving its consent swiftly, the Parliament would be making an essential contribution to ensuring that EU agricultural exports get significantly better access to the Korean market, and possibly also increase their market share in Korea.
As you can see, the agreement will bring huge benefits to the UK economy, which is why I will be doing my utmost to ensure that it is ratified as soon as possible.
