Italy is prepared to block a free trade agreement (FTA) between the EU and South Korea unless it gives European carmakers a year to prepare for the lowering of trade barriers. Meanwhile, the European Parliament is flexing its new legal muscle on the deal.
“We have asked for changes, especially for the auto sector, but unfortunately our suggestions were not accepted,” the Italian junior minister for trade, Adolfo Urso, told AFP on Tuesday (7 September).
He doubted the necessary changes would be made before a vote by trade ministers on Friday in which all 27 EU member states have to agree the deal.
The FTA ends import barriers for South Korean cars in the EU in either three years (for high and medium-powered vehicles) or five years’ (small cars) time, causing alarm in major car-producing EU countries.
Opponents of the treaty say it offers too many concessions to Korean companies in the area of duty drawbacks, a mechanism under which Korean companies can claim back EU import duties on car components purchased in third countries.
Meanwhile, the European Parliament decided on Tuesday to postpone its final vote on a separate part of the FTA, a bilateral safeguard clause, which aims to protect vulnerable European companies.
The parliament, which in a new development under the Lisbon Treaty holds the role of co-legislator on trade pacts, at its September session approved a report from the international trade committee concerning the safeguard mechanism, but did not want to vote in plenary before it has reached a compromise with member states.
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