SEOUL, Feb. 15 (UPI) -- South Korean exports could take a hit if the United States and the European Union conclude a free-trade agreement, South Korean analysts said Friday.
The United States and the EU, which together account for about half of the world's gross domestic product, have said they plan to conclude a trade agreement in two years, U.S. President Barack Obama said in his State of the Union address Tuesday.
That arrangement could result in South Korean exporters losing their foothold in the global market, the Yonhap News Agency reported, quoting the analysts.
"South Korea stands to benefit from a situation where there are trade barriers between the U.S. and the EU," said analyst Lim Noh-joong at the I'M Investment & Securities Co. "We may lose advantages in the two markets should they sign an FTA."
South Korea already has free-trade agreements with the United States and European Union that were completed in the past two years. The country now has a total of eight trade arrangements.
Lim said South Korean automakers, which compete strongly with European firms, could lose market share under a U.S.-EU agreement, Yonhap said.
Kim Hyung-joo, a researcher at the LG Economic Research Institute, agreed. He said such a deal could also hurt China, which is South Korea's largest trading partner.
"South Korea may no longer benefit from preferential tariffs," South Korean Ministry of Foreign Affairs and Trade official Park Jong-han told Yonhap. "Local exporters must utilize South Korea's free-trade pact with the two regions to beef up their competitiveness."