S. Korea, EU to announce conclusion of FTA later Monday: official

(ATTN: ADDS background para 2, other details in last six paras)
By Byun Duk-kun
STOCKHOLM, July 13 (Yonhap) -- South Korea and the European Union (EU) have
reached agreement on a proposed free trade deal, leaving only initialing and
signing of the agreement before it can be submitted to their respective
legislatures for ratification, a South Korean official said Monday.

South Korea and the EU began negotiations on an free trade deal two years ago. In
March this year, they reached a tentative agreement on the deal with two
stickiest issues -- duty drawback and rules of origin -- remaining unsettled.
The official said what he called a "virtual" conclusion of the free trade
agreement (FTA) will be declared later Monday by South Korean President Lee
Myung-bak and Swedish Prime Minister Fredrik Reinfeldt, who are set to hold a
bilateral summit here.
Sweden assumed the six-month presidency of the EU at the beginning of the month.
"The leaders will announce that a mutual agreement on all remaining points of
contention has been reached and will call for an early initialing of the deal
following swift legal reviews," the official, well versed in the Korea-EU FTA
negotiations, told reporters here.
"This means all negotiations have been concluded and that a Korea-EU FTA has been
reached," the official added.
Lee and Reinfeldt, in their announcement, are expected to say only that the
negotiations have culminated rather than declare an official accord. The
declaration, technically, needs to be made by the European Commission, the
executive committee of the EU that has led the FTA negotiations with Seoul.
At least three EU member states were earlier said to have opposed the EU's trade
deal with South Korea, but the South Korean official, currently accompanying the
president, said all the countries have withdrawn their reservations, with only
one country saying it needs a little more time to deal with any domestic
opposition.
"The sides should be able to conclude their legal reviews after a couple of
meetings by the end of August and then hold an initialing ceremony sometime in
September," the official told reporters.
Brussels had claimed that the so-called duty drawback, which allows Seoul to
return import tariffs to South Korean companies that use imported materials to
make products for exports, would favor South Korean exporters.
The EU does not allow duty drawbacks under its existing free trade accords with
Mexico and Chile.
Also, South Korea wants items made at a joint industrial complex in North Korea
to be treated as South Korean goods.
The EU was South Korea's second-largest trading partner after China last year,
with two-way trade reaching more than US$98 billion.
If the pact is finalized, it will boost South Korea's exports by $11 billion and
gross domestic product by 3.08 percent, according to a forecast by the Korea
Institute for International Economic Policy.
South Korea, Asia's fourth-largest economy, reached a free trade deal with the
United States in March 2007, shortly before it launched talks with the EU, but
the deal has remained stalled in both legislatures.
sam@yna.co.kr
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