SEOUL, May 7 (UPI) -- On the back of the recent conclusion of a free-trade agreement with the United States, South Korea started negotiations Monday for a similar deal with the European Union in hopes of making Seoul an FTA hub, linking Europe, Asia and North America.
By securing an FTA with the European Union, the world's biggest trading bloc, South Korea also wants to further jump on the free-trade bandwagon, which could ensure great benefits to its export-driven economy.
After reaching a trade accord with the United States last month, South Korea has quickly turned its attention to a bigger deal with the EU, which was its largest trading partner after China.
The first round of free-trade talks between South Korea and the EU, which would end Friday, will focus on setting the agenda and identifying issues to be addressed before launching full negotiations, South Korean officials said.
"During the first round, both sides will set a timeframe for negotiations such as when they will exchange offers on tariff elimination and how they will set parameters for an agreement," South Korea's chief negotiator, Deputy Trade Minister Kim Han-soo, told reporters.
The 22-member EU negotiating team is headed by Ignacio Garcia Bercero, director general for trade with East Asia of the European Commission.
"South Korea would try to seek greater access to the EU's auto, textiles and electronics markets, whereas the EU, for its part, would be interested in auto, machinery and chemistry sectors," Kim Dong-soo, the Finance-Economy Ministry's economic cooperation chief, told a local radio program.
No deadline is set for a deal, but South Korean officials hope to wrap it up within a year. The two sides are expected to hold four or five rounds this year and alternate between Seoul and Brussels.
"As the two sides share the goal of wrapping up negotiations as soon as possible, I would rather like to conclude a deal within one year," said Kim, who leads the country's 50-member delegation.
The 27-member European economic bloc was South Korea's second-largest trading partner after China last year, with two-way trade reaching $79.4 billion last year. South Korea is the fourth-largest non-European trade partner for the EU. The bloc is also the single biggest foreign investor in South Korea.
According to a study by the state-run Korea Institute for International Economic Policy, a free-trade agreement with the EU may increase South Korea's gross domestic product by as much as $26 billion.
In a joint news conference in Seoul Sunday, the two sides vowed to make the negotiations a "win-win" deal.
The proposed FTA "would open new markets and expand opportunities for Korean and EU businesses while giving valuable momentum to liberalization of global trade," South Korean Trade Minister Kim Hyun-chong and EU Trade Commissioner Peter Mandelson said in a joint statement.
"The kind of FTA that we have in mind is one that is ambitious in coverage, aiming at the highest possible degree of trade liberalization of services and investments," Mandelson said.
Kim also stressed the importance of free trade for South Korea, which relies on exports for more than 70 percent of its gross domestic product, describing market opening as a "matter of survival" for the country, not a "matter of choice."
"The Korea-EU FTA will provide an excellent opportunity for Korea to become the FTA hub in East Asia linking Europe, Asia and the United States," the trade minister said.
South Korea, the world's 11th-largest economy, reached a free-trade agreement with the United States in April despite strong protests by farmers and anti-globalization activists. The deal, which requires legislative approvals in both countries, is the biggest free-trade accord ever for South Korea. The United States was South Korea's third-largest market in 2006 after China and the EU. For the United States, the deal is the biggest since the 1993 North American Free Trade Agreement.
In a special statement after the deal with the United States, President Roh Moo-hyun said his country would make itself more of an open economy by clinching more free-trade deals, saying the accord is "a springboard for South Korea' economy to jump into an advanced economy."
South Korea plans to begin preliminary talks with China for a free-trade deal later this year. China has been South Korea's largest export destination since 2003, replacing the United States. China currently accounts for 21 percent of South Korea's total exports.
During his recent visit to the Middle East, Roh also floated the idea of forging a free-trade agreement with the six-member Arab Gulf Cooperation Council
Negotiations are also under way with Mexico, Canada and the 10-member Association of Southeast Asian Nations.
South Korea already has free-trade deals with Chile, Singapore and the European Free Trade Association, consisting of Switzerland, Norway, Iceland and Liechtenstein.
