EU Agrees to Changes in Dumping Laws

The European Union agreed to changes in its antidumping rules for South Korea as part of a

potential free trade agreement between the two sides, Seoul's chief negotiator said Tuesday in Brussels.

"Both sides have made a number of agreements in the sector of trade remedies," Deputy Trade Minister Kim Han-soo told reporters on the second day of the talks, adding the EU accepted most of South Korea's requests to soften its antidumping or subsidy rules.

"I think such compromise represents the EU's willingness for a quick conclusion of FTA talks with South Korea," Kim said.

The two sides launched the second round of negotiations on Monday, aimed at pushing forward an agreement. South Korea wants the EU to soften its antidumping rules, which Seoul believes often unfairly apply to its manufacturers.

One of the agreements calls for discussions between the two sides before the EU begins an investigation in an antidumping case, Kim said. The EU also agreed to change the way it calculates duties on products dumped into its market in favor of South Korea.

However, he said both sides still need to bridge numerous gaps, particularly in the automobile sector.

South Korea is being asked to quickly open its auto and auto parts markets, which the 27-nation EU believes have kept out European cars. But the South Korean government has maintained a conservative stance on the auto sector because it could potentially result in bigger losses for its auto industry.

The EU requested South Korea to phase out its 8 percent tariff on auto imports within three years, while Seoul proposed to phase out the tariff within seven years.

"Now, we're going through the EU's proposed tariff reductions on cars, but we need more time to decide our stance," Kim said.

Last year, South Korea sold some 740,000 cars, worth $9.1 billion, in Europe, while European automakers sold about 15,000 vehicles, worth $1.6 billion, in South Korea, according to data by the South Korean government. The EU's average tariff on car

imports is 10 percent.

On Monday, the EU's chief negotiator, Ignacio Garcia Bercero, expressed disappointment at the South Korean proposal. In response, Kim said South Korea is considering revising its offer on cars before the third round of talks in September.

South Korea won't provide any new proposals on autos during this week's talks, Kim said.

The EU was also asked to exclude South Korean cars from the EU's regulations on emission control, but Brussels refused to do so because the regulations must apply to all imported cars.

Other sticking points include pharmaceuticals, cosmetics as well as removal of non-tariff barriers in services and investment.

No particular deadline was set for the free trade talks between South Korea and the EU, but South Korean officials say they hope to wrap up the negotiations by the end of this year.

If successful, the agreement would be the biggest yet for South Korea, even larger than the agreement signed with the United States.

A deal would boost bilateral trade between South Korea and the EU, totaling $79 billion a year, by as much as 40 percent, according to a statement released by the EU's executive body.

South Korea and the U.S. signed a free trade agreement earlier this month but the deal needs to be ratified by the South Korean National Assembly and the U.S. Congress.