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.
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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
Click to hear the vocabulary:
- a highly significant deal
a very important agreement
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
here, faced a number of difficulties
- 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
- to come into force
to become valid/effective