While the European Union (EU) and Republic of South Korea (ROK) are struggling to cope with forex volatility that has dampened their exports and economic growth this year (particularly the EU that has been plagued by a dire fiscal position and lofty unemployment amid a continuing global downturn expected to continue into 2011), the signing of the Free Trade Agreement (FTA) between the EU and South Korea, which is due come into force in July 2011, should help bolster their economies through exports. Currently, the EU serves as South Korea's second largest export market after China, accounting for 13 percent of their total exports; South Korea is the EU's eight largest trade partner. This FTA would require both sides to liberalize their service sectors, which bodes well for the EU's efforts to expand further into South Korea's service sector.
KResearch is of opinion that certain Thai exports to South Korea and the EU would face tougher competition if the EU-South Korea FTA comes into effect on schedule in July 2011. Among the likely casualties would be air conditioners, because the EU and South Korea have agreed to lift their import tariffs on this product category within seven years. However, overall Thai exports to South Korea may not be affected much because among the more important products that Korea has agreed to immediate tax cuts with the EU are auto parts, but these are not among our major exports to Korea.
Meanwhile, if Thailand is able to clinch an FTA with the EU in the near future, too (Thailand is holding public hearings before commencing FTA negotiations with the EU), our exports to the EU, such as garments and footwear, could grow further and be as competitive as those from South Korea. In return, we would then also likely see more products and services from the EU entering the Thai market, as well.
Annotation
This research paper is published for general public. It is made up of various sources. Trustworthy, but the company can not authenticate. reliability The information may be changed at any time without prior notice. Data users need to be careful about the use of information. The Company will not be liable to any user or person for any damages arising from such use. The information in this report does not constitute an offer. Or advice on business decisions Anyhow.