Foreign Relations of South Korea - European Union

European Union

The European Union (EU) and South Korea are important trading partners, having negotiated a free trade agreement for many years since South Korea was designated as a priority FTA partner in 2006. The free trade agreement has been approved in September 2010, following Italy's conditional withdrawal of its veto of the free trade agreement. The compromise made by Italy was that free trade agreement would take provisional effect on July 1, 2011. South Korea is the EU's eighth largest trade partner, and the EU has become South Korea's second largest export destination. EU trade with South Korea exceeded €65 billion in 2008 and has enjoyed an annual average growth rate of 7.5% between 2004 and 2008.

The EU has been the single largest foreign investor in South Korea since 1962, and accounted for almost 45% of all FDI inflows into Korea in 2006. Nevertheless, EU companies have significant problems accessing and operating in the South Korean market due to stringent standards and testing requirements for products and services often creating barriers to trade. Both in its regular bilateral contacts with South Korea and through its FTA with Korea, the EU is seeking to improve this situation.