The European Union wants to expand its free trade agreements to include South Korea and is expected to reach an agreement between its trade ministers after the weekend.
The lifting of import tariffs would be a boost to the Korean automakers Hyundai and Kia Motors Corp. who are known for manufacturing low-cost vehicles.
The delay before the weekend and the objection to the free trade agreement comes primarily from Italy and its automaker Fiat Spa. Fiat fears unfair price competition if the import tariffs are lifted since the company operates in the same small to mid-size sedan market segment. The Italian automaker is also trying to carve out a niche in the US auto market now that it owns a 25% stake in Chrysler.
The free trade agreement would save EU exporters 1.6 billion euros and the exporters 1.1 billion annually based on all traded goods. The EU would benefit from the new free trade agreement as it would allow European exporters to more easily trade their goods in the South Korean market without specific standards or requirements.
examiner.com
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