Korea-European Free Trade Association(EFTA) FTA
EFTA consists of 4 member countries in Western Europe that have not joined the European Union (EU): Switzerland, Norway, Iceland and Liechtenstein.
The Korea-EFTA FTA is Korea's third FTA following free trade pacts with Chile and Singapore. The Korea-EFTA FTA is also the first FTA that Korea concluded with a developed economy recording a GDP per capita over US$ 30,000. Furthermore, as Korea’s first FTA with European countries, the Korea-EFTA FTA is expected to act as a catalyst for expanded advancement into the European market by Korean businesses.
The Korea-EFTA FTA features a high level of liberalization covering a wide range of areas including Trade in Services, Investment, Intellectual Property Rights, Competition, and Broadcasting Services in addition to tariff elimination on goods.
According to the agreed upon tariff elimination schedules under the FTA, EFTA is to immediately eliminate all tariffs on all Korean goods (industrial and fishery) upon entry-into-force of the Agreement, while Korea is to phase-out tariffs on 99.1% of EFTA goods (industrial and fishery) within a maximum of 10 years.
Agricultural products are treated separately on a country-by-country basis under the bilateral agreements that Korea has concluded with Switzerland, Norway and Iceland respectively. The commitments made by the contracting parties fully respect mutual sensitivities regarding agricultural products, and therefore the FTA is not likely to inflict damage on Korea's agricultural sector.
One noteworthy element is that the Korea-EFTA FTA is the second FTA to grant preferential tariffs to goods produced in the Gaesung Industrial Complex (GIC). This will secure more foreign markets for GIC-produced goods.
With the Agreement’s entry into force on 1 September 2006, Korea’s exports to EFTA are expected to grow further, mainly led by major Korean export items such as Electronics, Clothing, and Automotives. An increase in Korean exports of foodstuffs such as traditional liquors, Kimchi, and Ramen is also expected to occur from this FTA.
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