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Last updated at 10:11 BST, Friday, 16 October 2009

EU, South Korea free trade deal

Summary

16 October 2009

The European Union and South Korea have agreed on one of the world's biggest free-trade deals. It is estimated that the deal will be worth up to $28bn for the EU and about $18bn for South Korea.

Reporter:
Mark Sanders

euros

Euro banknotes

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Report

This is a highly significant deal reached between the 27 countries in the European Union and South Korea. Trade between the two was worth around $100bn last year. The EU says it's the most important free trade agreement ever negotiated between it and a third country.

The deal will see the quick elimination of $2.3bn worth of duties for EU exporters to Korea. Europe's trade Commissioner, Baroness Ashton, said the agreement will create new opportunities for European companies in services, manufacturing and agriculture. She stressed it was particularly important in the current economic climate, helping to fight the downturn and create new jobs.

But European car manufacturers object to the deal, arguing that dropping the EU's current 10% tariff on Korean vehicles coming into Europe would harm them. A spokesman for the Association of European Car Makers, an industry which has struggled during the recession, said the accord would give a huge competitive advantage to South Korean manufacturers.

The agreement still has to be ratified by all 27 EU governments, the European Parliament, South Korea's Cabinet and President. If it passes that process it's expected to come into force next year.

Mark Sanders, BBC News, Brussels

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Vocabulary

a highly significant deal

a very important agreement

elimination

getting rid, stopping, cancelling/cancellation

current economic climate

general state of and tendencies in the global economy at present

to fight the downturn

here, to make continuous efforts to overcome the economic crisis

object to

are against

struggled

here, faced a number of difficulties

accord

agreement, deal

give a huge competitive advantage

here, put (South Korean manufacturers) in a much better position on the market, giving them greater chances of commercial success

ratified

formally approved

to come into force

to become valid/effective

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