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Last Updated:[22-09-2009 08:02:10 EDT] Zoom in Zoom out Back to Tradenews

EU Allays Fears of Italian Auto Industry over S-Korean FTA

tradenews The EU trade commissioner informed Italian industry representatives that the Italian economy would stand to gain from the FTA with South Korea - which is expected to come into effect from July 2010. The EU Commissioner Catherine Ashton said it was estimated that Italian economy could earn $194mn per year while the FTA would allow cheaper car imports into Europe.

Ashton stated the deal would help the European auto makers to seize the opportunities in the new auto market. She reiterated there was no need to worry about any negative impact on the European auto industry as the deal as enough safeguards to protect the EU car makers.

The EU-Korea FTA had been deadlocked several times during the negotiations owing to opposition from the bloc’s car makers. The EU auto industry argued that the cheap Korean cars could eat away a major share of the EU car market causing losses to already troubled industry, the fall out of economic meltdown.

Besides Italy, Germany, France and Spain also nurse similar fears as their economies dependence on the auto industry is huge. The EU auto industry, the largest in the world directly employs close to 2.5mn people and about 10mn in subsidiary sectors, and job losses of the industry would be a respective governmental concern.

The EU is South Korea’s second largest export market after China, and the Asian country is the EU's fourth-largest non-European trade partner. The successful signing of the deal is expected to give a gigantic boost to the two-way trade between both sides and estimated to be more than $125bn.

The South Korean and the European Union representatives have completed the formal negotiations for the trade agreement that would reduce tariffs on chemicals, textiles, machinery and automobiles. The translated copies of the proposal will be ready within four months in 23 different EU languages apart from the Korean one.

Ashton said the proposed accord aimed to "open a new market in Korea for cars, and to ensure we have safeguards in place to protect industry in the future." Italian vice minister Adolfo Urso, who attended the briefing with Ashton, also shared the opinion of the trade commissioner.

By Jose Roy

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