E.U. to Ratify First Free-Trade Deal With Asian Partner

BRUSSELS — The European Union said Thursday that it would sign a sweeping free-trade agreement with South Korea, its first with an Asian trade partner.
Officials welcomed the deal as proof that protectionist pressures were being resisted despite the temptations of governments to shield their industries from competition at times of economic uncertainty.

“This is the first generation of bilateral trade agreements which will bind Europe and Asia together in an ever-closer economic bond,” said Steven Vanackere, deputy prime minister and foreign minister of Belgium, which holds the union’s rotating presidency. “This is a very big step in opening markets in Asia for our companies.”

The agreement is expected to be signed at a meeting of the European Union and South Korea in Brussels next month and will take effect July 1, 2011, Mr. Vanackere said during a news conference.

Italy had initially resisted the pact, which required backing from the 27 European Union member states, because of worries about the effect on its automobile industry. Italy dropped its objections after it achieved a small concession, under which the introduction of the agreement was put off by six months.

The deal will remove nearly all tariffs between the two economies, as well as many other barriers. The European Commission estimates that it will be worth as much as 19 billion euros ($25 billion) in new trade for European Union exporters and will create jobs.
Trade between the union and South Korea was worth about 53 billion euros last year.

In Seoul, the Ministry of Foreign Affairs and Trade said the deal would help South Korean businesses through the lifting tariffs on important exports like cars, televisions, textiles and shoes.

President Obama has been trying to win support for a free-trade deal between the United States and South Korea but the accord is strongly opposed by the American beef and auto industries, and by labor unions, which say it fails to end what they see as unfair restrictions on sales in South Korea.
Choe Sang-hun contributed reporting from Seoul.

September 16, 2010
By STEPHEN CASTLE
Source: nytimes.com