2019 has been a turbulent year for both the EU and Korea. Much of the EU's attention has been focused on the finalisation of BREXIT and a change of guard at the top of EU institutions. Since last summer, the mood in Korea has been overshadowed by the trade dispute with Japan and by the stagnation of the US-DPRK denuclearisation and peace talks. Both, the EU and the Republic of Korea are concerned and affected by the US trade policy and its economic consequences.
2019 will also be remembered in Korea as the year when the movie "Parasite" was released and recognised in Cannes. The "Palme d'Or" initiated a trophy harvest culminating in the well-deserved 2020 Oscars.
While we all wish that the new year becomes better than the old one, we are confronted with the fallout of the Coronavirus crisis and persisting trade tensions. I would like to reassure you that the EU remains committed to rules-based trade and that we will continue listening to your concerns and support you.
The corner stone of our economic relationship remains the EU Korea Free Trade agreement (FTA), in force since 2011. EU-Korea bilateral trade in goods amounts to more than EUR 100 billion annually, up by 50% since the entry into force of the FTA. The deal is clearly a win-win one. It helps us to maintain an increase in the overall trade between the EU and Korea despite a more demanding environment. As a vibrant, high-income and consumer-driven economy Korea is an ideal country for EU companies to export and launch businesses overseas.
The EU is the 4th largest trade partner of Korea, right after China, ASEAN and the US, but before Japan. Korea is the 8th largest trade partner of the EU ahead of countries like India and Brazil. In 2019 the EU remained with 33% of total FDI stock by far the largest foreign investor in Korea; the respective ratio for Seoul is nearly 50%.
At the same time, we still face challenges and there is room for improvement. The World Bank's "Ease of Doing Business" survey ranked South Korea number 5 in the world in 2019. However, real impediments remain. You have well documented them in your annual White Book that some regulations, non-tariff barriers, and Korea-specific standards prevent your companies from competing on a level playing field with Korean competitors. Correcting them would improve the business climate in the mutual interest.
Furthermore, our trade relationship is not only about exchanging goods and services; it is also about agreed values and commitments in trade related fields such as labour. That is why we agreed to commitments on fundamental labour standards in our FTA. These commitments are critical to ensure that workers are treated fairly, can exercise their rights freely and share the benefits of our trade agreement.
Although it is delivering, the EU Korea FTA is aging and is in need of an upgrade, with a view to closing legal loopholes or adding new features such as an investment chapter. Both parties should strategically reflect on the potential benefits stemming from a possible modernisation of the EU Korea FTA.
The EU and Korea share similar views about global trade: we oppose protectionism and support the multilateral, rules-based system with the WTO at its core. We share the same belief that free and fair trade is the bedrock of our prosperity.
For the Republic of Korea, the EU is a large, stable, reliable, like-minded trade partner. Korea would like to diversify its trade to gain more autonomy and security – the EU is open for business.
The EU Member States and Korea are ranked among the most innovative countries in the world. Therefore it is important that we continue to expand our cooperation on innovation, science and technology making good use of the last year of the EU Horizon 2020 programme, in areas such ICT (5G), AI, IoT, automated vehicles, nanotechnology, health bio-technology. The successor programme, Horizon Europe, is already on the horizon, the world largest programme for research and innovation where we hope that Korean institutions will participate like in the past as we face the common challenge of the 4th Industrial Revolution.
2020 will see an important milestone in this area with the up-coming new strategies on Digital Economy and Green Technology to be released by the Commission. It will serve as a support to effectively bridge uniting European and Korean companies, organizations and entrepreneurs eager to explore new opportunities.
Last November, I had the pleasure of joining the press conference launching the above mentioned ECCK White Paper. The press conference was followed by a luncheon with Trade Minister Yoo. We took together the opportunity to show our commitment to strengthening the business relationship between the EU and Korea, and to address concretely a number of key trade and investment impediments.
The White Paper, the Business Confidence Survey and the Annual Report have become reference documents of the ease of doing business in this country, and are attracting increasing media attention.
Supporting your success in doing business in Korea in collaboration with our friends and partners at the ECCK will remain one of my top priorities. Our teams are working together more closely than ever before to promote trade, investment and resolve market access issues.
ECCK is our partner for advocacy, complementing the work of national chambers. Your strength and engagement is our strength. Therefore I encourage all ECCK members to get involved in the excellent range of events, initiatives and advocacy activities ECCK offers under the dynamic leadership of Chairperson Dimitris Psillakis and his team throughout the year, covering the breadth of business challenges and opportunities here in Korea.
I wish to congratulate wholeheartedly ECCK for its excellent work at the service of the interest of EU businesses, and assure them of the strong support of the EU Delegation.
H.E. Michael Reiterer
Ambassador
Delegation of the European Union to the Republic of Korea
Message from Ambassador of Delegation of the European Union to the Republic of Korea
