South Korea, EU near free trade deal

The Jakarta Post, The Associated Press, Seoul | Mon, 03/16/2009 8:42 AM  

South Korea and the European Union are on the verge of concluding a free trade agreement and are considering making a formal announcement at next month's meeting of Group of 20 leaders in London, news reports said Monday.

Yonhap news agency, citing officials it did not identify, said the two sides are near an agreement and will likely wrap it up at final talks next week in Seoul. 

Trade between South Korea and the EU reached over $90 billion in 2008. The EU is South Korea's second-largest trading partner after China, while the EU is the largest foreign investor in South Korea. 

The two sides have been negotiating since May 2007. Automobile trade, which strongly favors South Korea, has been a contentious issue. 

South Korean trade officials in charge of the negotiations could not immediately be reached for comment. 

Separately, South Korea's mass-circulation Dong-a Ilbo newspaper reported that the EU has proposed that the two sides announce the deal at the G-20 summit in London. 

Yonhap said South Korea and the EU have agreed to eliminate or phase out tariffs on 96 percent of EU products and 99 percent of South Korean goods with three years. 

The report also said they had agreed to eliminate all tariffs on cars within five years. 

South Korea and the EU are both eager to conclude free trade agreements. South Korea reached one with the United States, its fourth-largest trading partner, in 2007, though legislative ratification of the deal has languished in political limbo in both countries.