EU to develop free trade pact with South Korea

The council of the European Union yesterday gave its nod for a free trade agreement (FTA) with South Korea, subject to final approval by the European Parliament.

Italy, which opposed the deal initially on concerns of its adverse impact on the country's automobile industry, finally gave in on inclusion of a safeguard mechanism in the agreement that provides protection from sudden surges in imports of sensitive items such as small cars.

The 27-nation EU initialled the agreement in October 2009, which provides for progressive liberalisation of trade in goods and services by both the parties, as well as rules on trade-related issues such as competition and state aid, intellectual property and public procurement, according to a statement issued by EU.

The deal is expected to serve as a model for EU for similar bilateral trade treaties that are under development with other Asian and South American nations.

Commenting on the deal, the UK prime minister David Cameron said: ''Not only would the deal boost trade with South Korea, but also make sure we sign further free trade agreements with other countries including India in the future.''

Formal signing of the agreement is expected to take place during the forthcoming EU-South Korea summit to be held in Brussels in the first week of October.