EU trade relations with the Republic of Korea. Facts, figures and latest developments.
The EU’s trade relations with the Republic of Korea* are governed by the EU-Republic of Korea Free Trade Agreement (‘FTA’ hereinafter), provisionally applied since July 2011 and formally ratified in December 2015. The FTA was the EU’s first with an Asian country and the first to include a chapter on trade and sustainable development.
To complement the FTA, the EU and the Republic of Korea launched negotiations for a digital trade agreement on 31 October 2023, building on the EU-Republic of Korea Digital Trade Principles agreed in 2022. The two sides intend to agree on a set of ambitious, modern digital trade rules, building on and complementing the existing preferential trade framework..
*Covering the territory of the Republic of Korea, commonly known as South Korea.
EU-South Korea Free Trade Agreement | Digital Trade Agreement
In place | Being negotiated
The Republic of Korea is one of the most dynamic economies in the world, with a GDP of about €1.5 trillion. It ranks as the 13 th largest economy in the world and the 4 th largest economy in Asia. Additionally, the Republic of Korea is a highly successful economy at the technological forefront, spending 4.9% of its GDP on R&D, ahead of the EU at 2.3%. This is reflected in the country’s industrial strengths, which include high-tech and R&D intensive products such as semiconductors, pharmaceuticals and biotechnology, consumer electronics, and the shipbuilding and automotive sectors, including EV batteries.
In 2023, the Republic of Korea’s bilateral trade in goods with the EU reached ca. €130 billion, up by 106% from 2011 when the FTA was first applied. The FTA removed the majority of import duties in 2011, with those remaining removed after five years on 1 July 2016 – with the exception of duties on a limited number of agricultural products.
The agreement also addresses non-tariff barriers to trade, specifically in the automotive, pharmaceutical, medical devices and electronics sectors. The FTA has also created new opportunities for market access in services and investments, and includes provisions in areas such as competition policy, government procurement, intellectual property rights, and transparency in regulation.
Regarding the implementation of the FTA, progress has been made with regard to the Republic of Korea’s recognition of the EU’s regionalisation measures to control outbreaks of African swine fever and the highly pathogenic avian influenza in 2022.
Additionally, and following continuous engagement between the EU, Member States, and the Republic of Korea, the Korean government abolished local content requirements in the offshore wind energy sector, which had allowed for higher prices for windfarms that have a minimum of 50% domestic components. Meanwhile, the EU continues to closely follow developments in the sector advocating for predictability and transparency of the permission process and auction rounds.
The FTA is also the first such agreement of the EU that includes a chapter on trade and sustainable development (TSD). The chapter reaffirms the commitment of both parties to contribute to sustainable development, with binding provisions upholding and promoting social and environmental standards.
Following the activation of the bilateral dispute resolution mechanism under this chapter, the Republic of Korea is in the process of amending its labour laws in the context of ratifying International Labour Organisation Conventions.
To complement the FTA, the EU and the Republic of Korea launched negotiations for a Digital Trade Agreement on 31 October 2023, building on the EU-Republic of Korea Digital Trade Principles agreed in 2022. The two sides intend to agree on a set of ambitious, modern digital trade rules, building on and complementing the existing preferential trade framework.
Beyond trade, in 2010, the EU and the Republic of Korea upgraded their broader relationship to a Strategic Partnership. On 10 May 2010 the two sides signed a Framework Agreement, which entered into force on 1 June 2014. The agreement provides a basis for strengthened cooperation on major political and global issues such as human rights, non-proliferation of weapons of mass destruction, counter-terrorism, climate change, and energy security.
To ensure full implementation, the FTA established a number of specialised committees and working groups between the two parties. These bodies also provide an opportunity to seek resolutions to market access concerns and to engage in closer regulatory cooperation. They report to the annual Trade Committee between the EU and the Republic of Korea at ministerial level, which ensures the FTA’s proper operation.
