The Trade Markets And East Asian Economies

Decent Essays

As intended in the Global Europe strategy, the EU attempted to widen its trade market to East Asian economies. South Korea was the first for the EU to start that aim. Generally, tariffs on over ninety percent of goods are expected to be removed within 3 years and a total elimination of tariffs within 7 years for South Korea and within 5 years for the EU (Hwang and Kim, 2014). According to an econometric estimation, the most beneficial sector from the FTA should be the service sector, which could be liberalised up to seventy percent of the total (Copenhagen Economics and Francois, 2006). The level of the developments of agricultural trades between the two sectors was stationary as there is a large gap of surplus; the EU exported 1.39 …show more content…

As seen above, South Korea suits a perfect partner for DG Trade’s strategies: one it allows to open markets for their exporters and two it exchanges ‘pockets of protection’ such as service sector and automotive sector (Siles-Brugge, 2011). Nonetheless, negotiations experienced difficulties as the South Korea negotiators were not acting as offensively as the European officials would want to. For example, European negotiators suggested a substantial market access offer whilst Korean negotiators wished a rather modest submission (ibid). This strategic behaviour from the Korean side eventually brought more opportunities for the Korean automotive industry as an exchange to the service sector, although Korean negotiators had to comply with the standardisation of non-tariff barriers. The major issues on non-tariff barriers on automobiles were safety and environmental standards as the EU insisted the Korean automobiles to be standardised with the regional market as the orientation of their procedural regulations (Hwang and Kim, 2014). One of the propositions of the EU was to standardise the level of regulation on non-tariff barriers as the level of regulations

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