By Kim Jae-won
The free trade agreement (FTA) between Korea and the European Union, which took effect on the first of the month, appears to have injected an immediate jolt in trade for the economies involved.
The trade volume between Korea and EU nations for the July 1-13 period amounted to $3.1 billion, up 17.4 percent from the same period last year, according to data released by the Korea Customs Service (KCS).
Korean exports to the world’s biggest economic bloc reached $1.5 billion, up 19 percent, while imports from the 27 European nations rose 16 percent to $1.6 billion.
The pact is clearly playing an influential role in boosting bilateral trade, the customs agency said.
“The FTA is expanding Korea’s trade front further into the EU, although uncertainties remain as many European nations are wrestling with fiscal problems,” a KCS official said.
The KCS said 55 percent of the Korean goods exported to the EU during the period appear to have benefited from lowered tariffs, compared to 13 percent of imported European goods enjoying the same advantages.
The bilateral FTA requires the EU to eliminate 99.4 percent of tariffs on Korean goods imported to the region within the next three years, while Korea has to eliminate 95.8 percent of tariffs on European products during the same period.
Although the implementation of the FTA so far has fared well, analysts say managing product origin will remain crucial for Korean firms as European authorities are concerned that goods from other countries such as China can be increasingly exported, disguised as Korean goods.
Ambassadors from European nations expressed their worries on the fake origin issue to KCS Commissioner Yoon Young-sun and asked him to maintain thorough monitoring at a meeting in Seoul last month.
The free trade accord, signed in October last year, is the most crucial deal Korea has ever finalized, and is the first of its kind between an East Asian country and the EU.
The EU is the second-largest trading partner for Korea after China and it takes in around 20 percent of Korean exports annually. Last year, trade between the 27-member economic bloc and Korea totaled $92.2 billion, up 17 percent from 2009.
Korea’s exports to the eurozone reached $53.5 billion last year, with its trade surplus amounting to $14.8 billion.