[Opinion] The EU Market

The “50 Years of the EU” exhibition is being held at the headquarters of the EU Council in Brussels, Belgium. The exhibition is one of the events to celebrate the Rome Treaty, which was concluded in March 25, 1957 and laid the foundation of EU. The official site of the EU is providing people with quizzes about the history and the current state of EU in eleven languages. This shows one part of the “unity in diversity” of the 27 member countries.

The EU is Korea’s second largest trade partner following China. The volume of exports to the EU started to outgrow those to the U.S. starting in 2005. Also, the EU has invested 40 billion dollars in Korea. Some pointed out that Korea’s exports to the EU would decrease when ten Eastern European countries joined the EU. Contrary to our expectations, Korea’s exports to the EU increased. Hyundai Motors, Samsung Electronics, and LG Electronics are taking full advantage of Eastern Europe to expand market share in EU countries. In addition, Korean companies have spent 1.2 billion dollars on marketing to the Eastern European countries for the past three years.

Yesterday, the government decided to launch FTA negotiations with the EU. The first round of negotiations will be held in Seoul from May 7 to 11. The two parties understand each other fully thanks to preparatory negotiations held last year. Fortunately, the EU has signed the “U.S-EU Economic Partnership,” which is the first step to creating a single market, at the U.S-EU summit. The partnership focuses on unifying regulations in order to increase trade and investment between both sides. Korea will become the leader in “market unification” if it concludes an FTA with the EU.

The EU has publicly selected Korea, the ASEAN, and India as FTA countries. This shows that the EU is engaging itself with the East more and more. The EU did not show much interest in Korea until 2005. However, the announcement of the KORUS-FTA grabbed the EU’s attention. Now, the EU is willing to conclude an FTA with Korea. This means that the KORUS-FTA has given Korea the upper hand at the negotiating table. Korea and the EU will be ideal partners for each other since the EU shows interest in automobiles, chemistry, wine, cheese, finance, and telecommunications, while Korea is interested in automobiles, electronics, textiles and clothing.

Hong Gwon-hee, Editorial Writer, konihong@donga.com