CYIL 2012

EUROPEAN UNION ȃ KOREA FREE TRADE AGREEMENT principle known as the most-favoured-nation treatment (MFN) set out in Art. XXIV of the General Agreement on Tariffs and Trade (GATT). Art. XXIV allows in para. 5 for the exception from the general obligation for the MFN under certain circumstances: “The provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of a customs union or of a free-trade area or the adoption of an interim agreement necessary for the formation of a customs union or of a free-trade area; Provided that: (b) with respect to a free-trade area, or an interim agreement leading to the formation of a free-trade area, the duties and other regulations of commerce maintained in each of the constituent territories and applicable at the formation of such free-trade area or the adoption of such interim agreement to the trade of contracting parties not included in such area or not parties to such agreement shall not be higher or more restrictive than the corresponding duties and other regulations of commerce existing in the same constituent territories prior to the formation of the free-trade area, or interim agreement as the case may be; where as defined in par. 8 (5) A free-trade area shall be understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XII, XIII, XIV, XV and XX) are eliminated on substantially all the trade between the constituent territories in products originating in such territories.” In terms of EU law, the FTA is based upon the Treaty on the functioning of the European Union (TFEU), 4 particularly upon Art. 207 of the TFEU, which defines the concept of the common commercial policy in para. 1 and sets basic requirements for the negotiation of international agreements within this policy. This is supplemented by the general provision governing the procedure for conclusion of international agreements between the Union and third countries or international organizations in Art. 218 of the TFEU. With regard to the division of competencies, the FTA is deemed to be a mixed agreement, covering both policies included among the EU’s exclusive competencies, as well as topics regulated by the member states of the EU. The issue of powers affected both the process of negotiation and the composition of the EU side of the Agreement, which is formally consisted of the EU and its member states alike. Therefore, the Agreement has to be adopted both by the EU and its member states, pursuant to their respective regulatory and legal requirements. 2.2 The course of negotiations and procedural framework within the EU In the strategy Global Europe, the European Commission identified Korea as one of the new potential priority partners to conclude a free trade agreement, taking into account the set of the key economic criteria. 5 After less than a year following the 4 Treaty on the Functioning of the European Union (consolidated version), . 5 European Commission, Global Europe: Competing in the world trade, < http://trade.ec.europa.eu/ doclib/docs/2006/october/tradoc_130376.pdf >.

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