The Korea-EU FTA Negotiation in Agriculture :

This paper examines the Korea-EU FTA negotiation in agriculture and seeks some suggestions for successful conclusion of the talks. The EU has been asking Korea to open its agricultural market to the same extent that was agreed upon in Korea’s free trade agreement with the U.S. while the Korean government firmly opposes the EU’s request. Empirical data on agricultural trade are closely examined in terms of price as well as non-price factors to see how the trade creation and trade diversion effects will take place among the trading countries concerned. The results show that there exist many important items, such as pork, wine, whiskey, starch, etc., for which tariff reduction will not be critical for the interests of the EU when competing with the U.S. in the Korean market. It is, therefore, suggested that the EU needs to be more flexible in the talks as they can maximize trade diversion and creation effects stemming not only from price but from non-price factors in such products, rather than simply asking for the same level of market opening as in Korea-U.S. FTA. For other products, it would be possible for Korea to be more flexible.