South Korea-EU FTA Beneficial to Both

South Korea and the European Union signed their FTA 10 years ago. According to the Korea International Trade Association, the FTA has led to a considerable increase in automobile, battery and chemical product exports from South Korea to the European Union.

In 2010, South Korea’s automobile exports to Europe were US$3.3 billion. The exports reached US$8.4 billion in 2019. Although internal combustion engine vehicle exports have decreased since 2017 due to an increase in local production, South Korea’s electric vehicle exports to Europe surged from US$200 million to US$4.6 billion from 2017 to 2020. South Korea’s lithium-ion battery exports to Europe have continued to increase, too.

When it comes to chemical exports, South Korea’s exports to Europe jumped from US$1.2 billion to US$7.1 billion from 2010 to 2020, led by positive electrode material exports.

In addition, South Korea’s agricultural and fisheries product exports to Europe rose to US$450 million last year. Although the imports from the European Union are still much larger, the FTA led to a 125 percent increase in exports. Kimchi, tuna, mushroom, seasoned laver and beverage exports led the export growth.

According to the association, the FTA resulted in more European premium consumer goods in South Korea and South Korean companies’ more efforts for non-price competitiveness enhancement. “These days, the European Union is reshaping supply chains and strengthening environmental and human rights standards to rely less on China, and this can be a new opportunity for South Korean companies,” the association explained, adding, “Although Japan, Singapore and Vietnam are also doing free trade with the European Union, South Korea is the first Asian country that concluded an FTA with the European Union, and it needs to better utilize the zero tariffs.