EU Auto Makers Say Free-Trade Deal Favors South Korea

Vehicle shipments between the European Union and South Korea remain lopsided in the Asian country’s favor – helped by automotive non-tariff barriers – since the adoption of their free-trade agreement a year ago.

ACEA, the European auto makers’ group, says figures for the first 11 months of the FTA highlight the uneven trade flow, with massive increases in South Korean car exports, yet only relatively modest gains for EU auto makers.

Since the FTA took effect July 1, 2011, South Korea has increased shipments of domestically manufactured vehicles 409% to 400,000 units, compared with year-ago, but imports of EU-built vehicles rose only 13% to 73,000.

Under the FTA, South Korean import duties have come down from 8% to about 6%, and EU import duties have been reduced from 10% to 8%.

ACEA Secretary General Ivan Hodac says it is too early to say if there is a direct relationship between the FTA and the increase in trade flows. “What is clear, however, is that European exports are being hampered by the continuing existence of automotive non-tariff barriers (NTBs),” he says in a statement.

“On the occasion of this 1-year anniversary, the ACEA calls on the (European) Commission to resolve the issue of existing automotive NTBs as well as ensure that no new ones are introduced.”