- The Washington Times - Monday, March 23, 2009

SEOUL, South Korea (AP) — South Korea and the European Union kicked off what they expect to be their last round of talks Monday toward a free trade agreement they hope will send a strong anti-protectionist message amid the global economic crisis.

South Korea’s chief negotiator Lee Hye-min and his EU counterpart Ignacio Garcia Bercero both said they expected the negotiations to be the “final” round at their level. Any deal would be sent on to their respective trade ministers for review and ultimately will require approval by South Korea’s National Assembly and EU governments.

The goal during the two days of talks was to “produce a provisional agreement ready for political discussion and approval,” Lee told the EU delegation at the start of the session.

South Korean officials said last week that if negotiators can reach a deal, trade ministers could announce its formal conclusion on the sidelines of the Group of 20 summit scheduled for April 2 in London.

Lee said an agreement would send “a very clear and forceful message to the international community” that South Korea and the EU both “take a lead in the fight against protectionism as responsible members of the global community.”

Garcia Bercero said that a deal would send a “very important signal” during these “difficult economic circumstances.”

The negotiations began in May 2007, before the onset of the global financial crisis. They are concluding, however, amid a major slowdown that has hit both the EU and South Korea and has raised fears globally that countries could resort to protectionism — blocking exports and foreign investment to protect national industries — to support their economies.

WTO Director-General Pascal Lamy warned at a forum in South Korea last month against such sentiments, saying “beggar-thy-neighbor policies” lead to retaliation and reduce trade.

A free trade deal between the U.S. and South Korea reached in June 2007 has yet to be approved by both nations’ legislatures, though skepticim about the perceived fairness of the agreement in the U.S. Congress in particular could make ratification difficult.

A South Korea-EU free trade agreement would slash tariffs and other barriers between what are already major commercial partners. Bilateral exchange reached $98.4 billion in 2008. The EU is South Korea’s second-largest trading partner behind China and its largest foreign investor.

Lee and Garcia Bercero Both cautioned, however that hurdles remain to be overcome. They did not elaborate, though automobile trade — in which South Korea enjoys a huge surplus — has been a drag on the negotiations.

“I would not hide that we still have in front of us some very difficult issues,” Garcia Bercero told the South Korean side. “I think, however, that there is a willingness to capture them and it will require of course flexibility and imagination by both sides.”

South Koreans bought 32,756 vehicles from EU member states last year, according to the Korea Automobile Importers & Distributors Association, accounting for 53.1 percent of the imported vehicle market.

South Korea, meanwhile, exported 408,934 vehicles to the 27-member EU in 2008, according to figures provided by the Korea Automobile Manufacturers Association.

Regarding autos, South Korean official Kim Hee-sang said last week that negotiators are working on an idea that would eliminate tariffs on small cars in five years and on mid-sized and large cars in three years.

In February, the European Automobile Manufacturers’ Association called on EU states to reject the proposed free trade deal.

Protesters have also targeted the South Korea-EU deal, though on a far smaller scale. About 10 demonstrators gathered Monday outside the Ministry of Foreign Affairs and Trade, the venue for the talks.

Associated Press photographer Jin-man Lee contributed to this report.

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