hankyoreh

Oct. 25. (Photo by Kim Gyoung-ho) 　

By Jung Eun-joo

The European Parliament passed safeguard measure legislation in its corresponding Standing Committee that would invalidate the South Korea-European Union Free Trade Agreement (KOREU FTA) formally signed by the two parties’ trade representatives on Oct. 16. The plan now awaits a final vote at the Nov. 23 plenary session. For this reason, the European Parliament’s vote on the KOREU FTA, which had initially been scheduled for late October, has now been postponed to mid-December.

If the European Parliament unilaterally alters safeguard provisions that conflict with the content of the FTA, the EU and South Korea will either have to renew negotiations or end up in an international dispute.

The South Korean government, meanwhile, submitted a ratification bill for the existing agreement to the National Assembly on Monday.

The section on trade regulations in the FTA signed by the the EU and South Korea states, “If, as a result of the reduction or elimination of a customs duty under this Agreement, originating goods of a Party are being imported into the territory of the other Party... under such conditions as to cause or threaten to cause serious injury to a domestic industry... [t]he importing Party may take a bilateral safeguard measure which suspends further reduction of the rate of customs duty on the good concerned... or increases the rate of customs duty on the good to a level which does not exceed... the MFN (most favored nation) applied rate of customs duty on the good in effect at the time the measure is taken.”

The European Commission introduced safeguard measure legislation based on this agreement and submitted it to the European Parliament. But the parliament, which assumed “co-decision” rights on trade policy with the Treaty of Lisbon that took effect in December 2009, has prepared an amendment for safeguard measures that clash with the KOREU FTA and is currently carrying out deliberations.

According to the parliament, the amendment, presented by Spanish representative Pablo Zalba Bidegain, would broaden the scope of conditions where safeguards apply to include damages arising from “uncertain economic activity.” For example, a European industry would be able to apply safeguards even when it suffers damages due to South Korean non-tariff barriers or industry policy that bears no direct relation with customs duties. Once the safeguard measure has been taken, customs duty elimination and reduction benefits according to the FTA are suspended.

Zalba Bidegain’s legislation also states that the European Parliament has the right to undertake studies for safeguard implementation and that each of the 27 member countries of the EU can exercise its own safeguard implementation rights. This stems from member country calls to prepare the eventuality of a rapid increase in imports for any one member nation. In the area of automobiles in particular, cars would be classified as private sector items like South Korean agricultural goods, and a system would be in place for regular monitoring of the import quantities for both finished cars and car parts.

The safeguard bill based the European Parliament’s Committee on International Trade by 27 votes in favor, none against, and one abstention. It now avoids a final vote at the plenary session of the parliament on Nov. 23. The parliament is scheduled to vote on ratification of the KOREU FTA on Dec. 14 following the vote on this safeguard bill.

“If the European Parliament modifies the safeguard provisions after our National Assembly has already ratified the KOREU FTA, the existing agreement will have be handled all over again from square one,” said Hanshin University International Relations Professor Lee Hae-young. “We should suspend ratification procedures in the National Assembly until a decision has been made by the European Parliament.”

A Ministry of Foreign Affairs and Trade official said, “We cannot interfere in the European Parliament’s legislation,” but stated that the ministry “has already communicated to the European Commission the rule that if the European Parliament’s safeguard legislation conflicts with the FTA text, the matter can be referred for international dispute resolution.”

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