Korea-EU FTA helps maintain trade, keep investment afloat

SEOUL, June 20 (Yonhap) -- The country's free trade agreement (FTA) with the European Union has helped keep its exports from plunging amid the prolonged financial crisis in Europe, the government said Thursday.

The Korea-EU FTA went into effect nearly two years ago on July 1, 2011.

 According to the Ministry of Trade, Industry and Energy, the country's exports to EU countries came to US$43.7 billion during an 11-month period from July 1, 2012, down 6.5 percent from the same period a year earlier.

 The ministry, however, said the country's exports would have dropped at a much faster rate had it not been for the Korea-EU FTA.

"Benefits from the Korea-EU FTA worked as a pillar supporting the country's exports from falling despite a significant drop in the EU's overall demand for imports," it said in a press release.

For instance, the country's exports to the EU between July 2012 and February 2013 dropped only 2.1 percent on-year while those of Japan, which does not have a free trade deal with the EU, plunged 12.4 percent, the ministry added.

The Korea-EU FTA also helped maintain a flow of investment to South Korea.

In the first 12 months since the implementation of the Korea-EU FTA, foreign direct investment (FDI) from EU countries in South Korea surged 14.3 percent on-year to $4.39 billion, according to the ministry.

The ministry said the FTA also helped create new markets for South Korean products.

The country's exports of luggage bags and handbags to Europe spiked 499.5 percent on-year in the first 12 months since the implementation of the Korea-EU FTA and again by 882.6 percent in the following 11 months.

"The government will continue to do its utmost to further improve the FTA and also provide administrative support to our firms in utilizing the FTA to help maximize the positive benefits of the Korea-EU FTA in the future," the ministry said.

June 20, 2013

Source: Yonhap News