CYIL 2012

EDITA ŠEDOVÁ ȃ DAVID MÜLLER

CYIL 3 ȍ2012Ȏ

3. Structure of the FTA and its key elements The FTA is organized into fifteen chapters, 17 several annexes and appendixes, three protocols 18 and four understandings. 19 Regarding the broad coverage of the Agreement the following chapters focus only on its essential parts and specifically on provisions exceeding current WTO framework. 3.1 Elimination of customs duties The Agreement sets a binding schedule for tariff elimination and moreover comprises a standstill clause, which prohibits increase of any existing duty or adoption of a new one. Currently, the average duty applied by Korea is 7,2%, which is a high number compared to the average tariff 0,8% applied by the EU. 20 On the basis of duty elimination the Czech exporters could obtain total savings in an amount exceeding 310 mil. CZK. 21 According to the Agreement, customs duties are removed over a transitional period and on a reciprocal basis. The transitional period started from the date of provisional application of the Agreement, i.e. July 1, 2011, when the majority of customs duties on goods were removed. For both industrial and agricultural products, Korea and the EU shall eliminate 98,7% of duties in trade value within five years of the entry of the FTA into force. 22 The transitional period ends in July 2031, at which time 99.9% of the EU-South Korea bilateral trade shall be duty free. The tariff liberalization does not cover only very few sensitive agriculture products. 23 On industrial products Korea shall remove in the first three years duties for 92% of goods in terms of trade and in five years 99% of products. The longest transitional period was set to seven years and relates to very few machinery, textile and wooden items. On the other hand the EU shall eliminate in three years 93% of its duties, while its import shall be fully liberalised within a period of five years. 17 Objectives and general definitions; National treatment and market access for goods; Trade remedies; Technical Barriers to Trade; Sanitary and Phytosanitary Measures; Customs and Trade Facilitation; Trade in Services, Establishment and Electronic Commerce; Payments and Capital Movements; Government Procurement; Intellectual Property; Competition; Transparency; Trade and Sustainable Development; Dispute Settlement; Institutional, General and Final Provisions. 18 Protocol concerning the definition of “originating products” and methods of administrative cooperation; Protocol on mutual administrative assistance in customs matters; Protocol on cultural cooperation. 19 Understanding on the Cross-border supply of Insurance services as Committed in the Lists of Commitments in Annex 7-A; Understanding on the Korean Postal Reform Plan; Understanding Concerning Specific Commitments on Telecommunications Services; Understanding on Regulations Relating to Zoning, Urban Planning and Environmental Protection. 20 WorldEconomicForum, TheGlobalCompetitiveness Report 2011-2012,. 21 Asociace pro mezinárodní otázky, Studie dopadů uzavření Dohody o volném obchodu mezi EU a Korejskou republikou na ekonomiku ČR, . 22 European Commission, The EU-Korea Free Trade Agreement in Practice, p. 6, . 23 Korea excludes squid, some kinds of vegetables (onion, garlic, peppers), some kinds of tea, barley, rice and ginseng; whereas EU excludes fresh or chilled tomatoes, oranges and two kinds of tangerines.

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