Evaluation of the Implementation of the Free Trade Agreement between the EU and its Member States and the Republic of Korea

Transcription

1 Evaluation of the Implementation of the Free Trade Agreement between the EU and its Member States and the Republic of Korea Interim Technical Report Part 2: Stakeholder Consultation Report Prepared by Civic Consulting and the Ifo Institute June 2017 The views expressed in the report are those of the consultants and do not present an official view of the European Commission.

2 LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. European Union, 2017 Reproduction is authorised provided the source is acledged. 2

3 TABLE OF CONTENTS 1. INTRODUCTION OVERVIEW OF RESPONDENTS LIMITATIONS OF THE CONSULTATION SUMMARY OF RESULTS OF THE PUBLIC CONSULTATION AND SURVEY ON CONSUMERS General questions Trade activities with Korea Trade in goods and customs procedures n-tariff barriers Investment Trade in services Sanitary and phytosanitary measures Intellectual property rights Public procurement Competition policy Regulatory changes and administrative burdens/compliance costs Domestic advisory groups and civil society forum Impact on consumers Trade and sustainable development Closing questions SUMMARY OF RESULTS OF THE SURVEY ON SMES General questions Trade activities with Korea Customs procedures Trade barriers Other problems Administrative burdens/compliance costs Closing questions ANNEX

4 1. INTRODUCTION A 12-week open public consultation on the implementation of the Free Trade Agreement between the EU and its Member States and the Republic of Korea was carried out from December 2016 to March In addition to the public consultation, two targeted surveys were conducted: a survey on consumer interests and sustainable development (survey on consumers) and a survey on small- and medium-sized enterprises (survey on SMEs). These surveys were also carried out from December 2016 to March This report summarises the results of the public consultation, the survey on consumers, and the survey on SMEs. As the survey on consumers consisted of a subset of questions from the public consultation that were more relevant to consumer and NGOs, 2 the results of the survey on consumers are presented together with the results of the public consultation. 2. OVERVIEW OF RESPONDENTS In total, 63 s were received: 50 s were submitted for the public consultation, seven for the survey on consumers, and six for the survey on SMEs. The majority of s were submitted by business (21) and companies (23). Six NGOs, three consumer, one trade union, 3 and six individual academics also provided s. A comprehensive range of sectors was represented in the s from companies and business, with manufacturing being the most common. Other sectors covered included inter alia information and communication, construction, mining and quarrying, and agriculture. All types of companies (independent, subsidiary, and controlling) were represented, as were all sizes, from micro companies (1-9 employees) to large companies (250 or more employees). With respect to country representation, the vast majority of respondents (58) were based in the EU. Three s were provided by Korean stakeholders, and two came from stakeholders in other countries. 3. LIMITATIONS OF THE CONSULTATION As the public consultation was made widely available to anyone with an interest in the EU-Korea FTA, it is not statistically representative of the EU population as a whole, or of individual Member States or Korea. The survey on consumers and survey on SMEs were targeted towards specific respondent groups and also are not representative. Additionally, as discussed above, the majority of respondents were either companies or business from the EU. This is not surprising, given that companies and their are directly affected by free trade agreements and typically are more informed on their provisions. As such, it should be borne in mind that the majority of replies in this report represent the EU business perspective, whereas input from other stakeholder groups/korean stakeholders is more limited. Where relevant, we have in the following provided the different perspectives of stakeholder groups. Detailed breakdowns of s from stakeholder groups for each question are provided in the Annex. 1 More details on the public consultation and the surveys are presented in the consultation strategy, available here: 2 Specifically, respondents to the survey on consumers were asked the questions from the following sections of the public consultation: General questions, Domestic advisory groups and civil society forum, Impact on consumers, Trade and sustainable development, and Closing questions. 3 In the following, we refer to NGOs, consumer and trade unions as civil society. 4

5 4. SUMMARY OF RESULTS OF THE PUBLIC CONSULTATION AND SURVEY ON CONSUMERS 4.1. General questions The vast majority of respondents were aware of the existence of the EU-Korea FTA. With respect to the main benefits of the EU-Korea FTA for companies, increased exports to Korea/to the EU, increased imports from Korea/from the EU and more opportunities for cross-border investment were the most commonly mentioned. A of EU business who indicated other benefits all commented on the higher degree of competitiveness enjoyed by EU companies due to tariff elimination Trade activities with Korea The large majority of companies/member companies of business are either currently involved in EU-Korea trade or are planning or exploring the possibilities for EU- Korea trade in the future. Only one respondent (an EU company in the beverages sector) does not intend to engage in EU-Korea trade. Similarly, the majority of companies/member companies of business currently have cross-border investments, had such investments in the past, or are planning or exploring the possibilities to invest in the future. Others do not intend to make such investments. Over half of companies have made use of the tariff preferences under the EU-Korea FTA. Among those that have not made use of the preferences, reasons included not ing how to take advantage of the tariff preferences, the tariff preferences not being relevant to companies products, and other (one EU chemical company elaborated upon this as a lack of competitiveness with Korea) Trade in goods and customs procedures Market access for goods under the EU-Korea FTA The large majority of companies and business that had an assessed that access to the Korean market for EU goods and access to the EU market for Korean goods has either very much improved or slightly improved since the application of the EU-Korea FTA. Most other companies and business were of the that market access remained the same. Several respondents (EU business representing various sectors, including transport, machinery, and electronic equipment) who viewed that access to the Korean market for EU goods remained the same commented on the introduction of new nontariff barriers, which counteracted the benefits associated with tariff reduction (see below for further details). The majority of other stakeholder groups (civil society and individual academics) had no or did not provide input regarding market access in the EU and Korea Customs procedures under the EU-Korea FTA Companies and business were divided in their views concerning how costs of customs procedures and time required for customs clearance when exporting from the EU to Korea have been ed since the application of the FTA, with the largest group of those having an indicating that costs/time remained the same. Of the 5

6 remaining companies/business, several indicated that costs/time decreased slightly or, in contrast, that they increased slightly. Most respondents from other stakeholder groups had no. The most common customs-related problems observed in both Korea and the EU were 'transparency/publication of and access to trade regulations', and 'import or export documentation requirements'. Also noted as a problem by a larger group of respondents were 'customs inspections' (in Korea). With respect to transparency of trade regulations in Korea, three respondents (all EU business ) commented on transparency problems specifically related to regulations of the Korea Occupational Safety and Health Agency (KOSHA). 4 The majority of respondents who observed customs problems in Korea or the EU also incurred costs as a result. Most costs were reported as either very or moderately significant Customs-related provisions of the EU-Korea FTA With respect to the functioning of customs-related provisions of the EU-Korea FTA, the large majority of companies and business expressing an were satisfied with approved exporter status, rules of origin, and administrative cooperation (in all cases with a minority indicating that they were rather not or not at all satisfied with these provisions). Companies and business were nearly evenly split in terms of their views on the direct transport provision slightly more than half of those with an were very or rather satisfied, with the others either rather not or not at all satisfied. While no clear sectoral patterns were discernible in most answers, the group of business stakeholders unsatisfied with the direct transport provision included crosssectoral (Europe) and sectoral /companies in the chemicals (Fecc, Cefic), basic metals, food products and beverages sectors (FoodDrinkEurope), and the engineering industries (Orgalime) n-tariff barriers Companies and business were divided in their views regarding non-tariff barriers for EU exporters due to measures applied by Korea after the application of the FTA: slightly under half of those with an thought that non-tariff barriers had increased in Korea, while others thought they decreased slightly or remained the same. 5 There is not always a clear sectoral pattern in the s: those respondents that were of the that NTBs had decreased slightly included a cross-sectoral organisation (Europe) as well as business /companies in the following sectors: production of food, dairy products (European Dairy Association), office administration and other business support activities, and production of chemicals and chemical products. In contrast, respondents that assessed that non-tariff barriers for EU exporters have even increased slightly or very much due to Korean measures included 4 One respondent Orgalime also submitted a separate position paper on this issue. In the paper, Orgalime welcomed the EU-Korea FTA and noted the developments in EU-Korea trade in the engineering industries, but also stated that NTBs in the form of the new KOSHA regulations overshadow these developments. Specifically, it was noted that the mandatory third-party certification system implemented by KOSHA is not transparent to foreign players and their Korean partners, and is furthermore costly and time consuming, which prevents EU companies from doing business with Korea, especially on a single-contract basis. 5 Only very few respondents commented on non-tariff barriers for Korean exporters due to EU measures, with their answers split between a slight decrease of NTBs, a slight increase or assessing they remained the same. Key specific NTBs mentioned by these respondents were 'other NTBs' (relating to the implementation of chemicals-related legislation in the EU) and licensing requirements and prohibitions. Due to the very limited of s received from Korean stakeholders, most of the few respondents that had an concerning this question came from the EU. 6

7 business in the following sectors: chemicals (Fecc, Cefic), and engineering/technology (Orgalime, German Engineering Association VDMA, Technology Industries of Finland). 6 Finally, business that indicated NTBs remained the same came from the following sectors: automotive (ACEA), dairy trade (Eucolait) and manufacturing. 7 The most common non-tariff barriers in Korea highlighted by respondents across all represented sectors were standards and other technical requirements, conformity assessment, and labelling and marking requirements. Several EU companies and business in the chemical sector commented specifically on the implementation and modification of Korea REACH (The Act on the Registration and Evaluation of Chemicals) as being burdensome for EU exporters. Significant non-tariff barriers were also cited by ACEA for the automotive sector. A German company in the food-manufacturing sector cited the lack of progress in the negotiation of a veterinary certificate for poultry products as a problem concerning trade in animals and animal products between the EU and Korea. The majority of respondents reported that they incurred very significant or moderately significant costs resulting from non-tariff barriers they experienced. s who indicated at least one non-tariff barrier were split in their views on their causes, with some attributing them to issues that are out of scope of the FTA, and others pointing to FTA implementation problems Investment The majority of business and companies that had an on whether the environment for EU direct investments in Korea had improved since the application of the EU-Korea FTA indicated a slight improvement for EU FDI in Korea. Most of the remaining business and companies with an considered that it had remained the same. 8 Two responding companies noted problems concerning investment protection in Korea, which included discrimination against non-national investors, seizure of assets without proper compensation, and restrictions on international capital transfers. The only business association with an in this respect (Cefic) commented that in general, Korea maintains a rather solid rule of law, also regarding investment protection. However, based on the input of Cefic members, the lack of due process in the Korean court system was considered an issue. When asked if costs were incurred due to these problems, two of the three respondents confirmed they incurred moderately significant costs as a result (mostly for Korean lawyers, as one respondent specified) Trade in services Two-thirds of business and companies that had an on whether the access to the Korean market for EU services had improved since the application of the 6 All three listed indicated that non-tariff barriers increased very much. 7 es that shared the view that NTBs have remained the same came from the food/agriculture sectors and a company operating in a variety of sectors, including production of computer, electronic, and optical equipment. 8 te that most frequent answer of business and companies was 'no /don't ' (as was indicated by all respondents from civil society and individual ). Regarding the question on the environment for Korean FDI in the EU, an even lower of respondents had an (and provided various answers: slightly improved/remained the same/slightly worse). 7

8 EU-Korea FTA, indicated that access had slightly or very much improved. The remaining business respondents with an considered that it had remained the same. 9 In addition to responding to the public consultation, the European Services Forum (ESF) also submitted its preliminary assessment of the EU-Korea FTA five years after entering into force. The assessment emphasised the need to provide more and better statistics on trade in services, given the difficulties of finding this data with respect to trade with Korea; it also stated that it is too soon and difficult to assess whether the FTA has been an incentive for EU services providers to establish themselves in and do business with Korea. Four of the respondents had observed problems concerning trade in services between the EU and Korea (in Korea), referring most frequently to 'discrimination against nonnational service providers' and 'other problems' Sanitary and phytosanitary measures Half of the companies and business that had a view on whether trade in EU animals/animal products with Korea after the application of the EU-Korea FTA had become easier, considered that it remained the same. (Eucolait, which indicated that trade remained the same, commented, however, on the Korean ban on soft raw milk cheeses and a lack of clarity and transparency in the current procedure for registering plants in Korea.) Other respondents with an considered that trade had become easier in this respect, or indicated that trade had become much more difficult (an EU food manufacturer). 11 The most common problems reported concerning trade in animals/animal products in Korea were transparency regarding national sanitary requirements and approval of establishments for products of animal origin. With respect to trade in EU plants/plant products, the same EU food manufacturer mentioned above indicated that such trade had become much more difficult Intellectual property rights Two-thirds of business and companies that expressed an on whether the protection of EU intellectual property rights in Korea improved since the application of the EU-Korea FTA indicated that such protection has remained the same. The remaining respondents with an indicated that protection of IPR has improved in Korea, with one of them (Eucolait) commenting on the protection of geographical indications (including a of prominent cheese names) being included in the scope of the FTA. With respect to the protection of Korean IPR in the EU, all business and companies with an indicated that such protection has remained the same since the application of the FTA te that most frequent answer of business and companies was ' /don't ' (as was also indicated by nearly all respondents from civil society and individual ). Regarding the question on access to the EU market for Korean services, only 2 respondents had an (slightly improved/remained the same). 10 s that indicated 'other problems' suggested that "procedures are never specified clearly and authorities never give a final answer". 11 With respect to trade in Korean animals/animal products with the EU, the two respondents with an indicated that such trade had remained the same in terms of ease since the application of the EU-Korea FTA. 12 /don t was indicated by all respondents with respect to trade in Korean plants/plant products. 8

9 The most frequently noted IPR-related problems were indicated with respect to designs and other areas in Korea. Concerning the latter, one respondent (an EU company in the beverages sector) indicated that they had to submit complete recipes and manufacturing processes to the Korean authorities before they could obtain a license for their products, even though these constitute business secrets. Another respondent (the European Games Developer Federation (EGDF)) indicated that Korean producers often duplicate existing European mobile games, leading local consumers to believe that the duplicates are original applications Public procurement Among the companies and business who had an regarding whether access to public tenders for EU suppliers in Korea improved since the application of the EU-Korea FTA, views were split: half thought that access remained the same, whereas others stated that access slightly improved or became worse. 14 Local content requirements were cited by the most respondents as an area in which problems concerning public procurement were observed in Korea. Other problems noted by respondents included lack of transparency on procurement opportunities, lack of clarity of the applicable rules, and/or of the applicable procedures, lack of access to tenders of state owned companies/public undertakings, lack of access to government tenders at the sub-central level, and discrimination through technical specifications. Among the respondents who indicated problems, two reported incurring costs as a result. In a comment, Europe indicated that Korea has increased use of SME provisions in connection with public tenders, which effectively excludes larger companies from participating. Another EU business association stated that with respect to tenders in the rail sector in Korea, there is a strong preference for domestic industry (e.g. via requirements related to local partnerships and local content) Competition policy With respect to whether free and undistorted competition in the Korean economy has improved since the application of the EU-Korea FTA, s among companies and business were mixed: slightly under half of the respondents with an indicated that competition remained the same; the remaining indicated that competition in Korea had either slightly improved or become very much worse. SEA Europe, which indicated that competition in Korea had become very much worse, commented on the 13 te that the most common across all respondents was no /don t with respect to IPR in the EU and Korea. 14 The majority of companies and business, as well as all civil society and individual responded with no /don t. respondents indicated views concerning public procurement in the EU. 9

10 Korean shipbuilding industry, which has benefited from state aid for several years in spite of overcapacity on the global market. 15 In terms of competition in the EU economy, slightly more than half of companies and business with an indicated that competition had remained the same since the application of the FTA. Among the other respondents with views, slightly improved, slightly worse, and very much worse were all chosen. The most commonly reported competition-related problems in Korea were abuse of a dominant position, state aid, and companies being granted special or exclusive rights or privileges. ( Cartels and vertical or horizontal restrictions of competition were also cited as problems in Korea.) Five company/business association respondents who reported problems also indicated that they incurred costs as a result three reported moderately significant costs, and two indicated very significant costs Regulatory changes and administrative burdens/compliance costs Regulatory changes A majority of respondents with an considers that required regulatory changes to implement commitments from the EU-Korea FTA in Korea were either fully or partly made, or were not needed in the relevant area. However, a relevant sub-group of business indicated that required regulatory changes have not been made. In the follow up question, respondents were asked to specify the FTA provisions for which regulatory changes have not or only partly been made. Technical barriers to trade, market access for goods, and sector-specific annexes on non-tariff barriers were considered to be common provisions for which regulatory changes have not been made or have only been partially made in Korea. 16 The respondents (among them Cefic and Fecc) who indicated insufficient regulatory changes with respect to the sector-specific annexes on non-tariff barriers referred specifically to the aforementioned Korea REACH legislation in connection to the sector-specific annex on chemicals. ACEA also commented on a proposed Extended Producers Responsibilities bill in Korea that would become a significant burden for EU automotive manufacturers, as well as the overall concern that Korea has not harmonised its national requirements to international standards. With respect to regulatory changes in the EU, the majority of companies and business with a view indicated that required regulatory changes were either fully or partly made, with one EU company indicating that no regulatory changes were required in the relevant sector. 15 In addition to responding to the public consultation, SEA Europe also submitted a separate position paper regarding the current challenges the EU maritime technology industry is facing. The paper noted that some EU marine equipment manufacturers have experienced increased exports in the years following the entry into force of the EU-Korea FTA, but raised the issue of state support to the Korean shipbuilding industry. It was noted that the Korean government attempts to rescue individual companies from bankruptcy and stimulate shipyards via financial schemes and other support policies, which could be in violation of obligations under the EU-Korea FTA. Specifically, subsidies covering debts or liabilities of certain enterprises and subsidies to insolvent or ailing enterprises without a credible restructuring plan could, in SEA Europe s view, be regarded as prohibited subsidies in light of the FTA insofar as they adversely affect international trade. The position paper reiterated the request for the Commission to raise this issue in the framework of the consultation mechanism and transparency provisions of the FTA. 16 The most common among companies and business concerning regulatory changes in both Korea and the EU was don t. 10

11 Administrative burdens/compliance costs The majority of companies and business with an on whether administrative burdens related to customs procedures had increased since the application of the EU-Korea FTA indicated that such burdens had increased; others indicated that these burdens remained the same or decreased slightly. With respect to changes in other administrative burdens and substantive compliance costs since the application of the FTA, the majority of companies and business with an indicated that these burdens remained the same. (Among the other respondents with views in this area, Europe indicated that these burdens decreased slightly, and the European Games Developer Federation indicated that they increased slightly.) In their comments, four EU respondents (three in the chemicals sector, one in the textiles sector) specifically described increased administrative burdens associated with the documentation required to prove the origin of goods under the FTA. Additionally, ACEA commented on new requirements for procedures of certification and aftermarket surveillance, technical documents, and shifted penalty conditions for the automotive industry. The EGDF noted inter alia the need to obtain a rating certificate from the Korean Game Rating and Administrative Committee in order to publish games that aren t suitable for minors under 18 years of age. FoodDrinkEurope also commented on the burden of the direct transport rule on businesses that use trade distribution hubs in other Asian countries Domestic advisory groups and civil society forum The large majority of respondents (mainly civil society and ) who had on on whether the EU and Korean Domestic Advisory Group (DAG) and the Civil Society Forum (CSF) contributed to the implementation of the trade and sustainable development chapter thought that the EU DAG contributed either very much or moderately in this respect. 17 Recommendations not taken into account was the most common problem mentioned concerning the EU DAG and the CSF, whereas lack of coordination/cooperation was mentioned the most often as a problem concerning the Korean DAG. In their comments, two respondents (ClientEarth and the Austrian Federal Chamber of Labour) brought up the fact that the EU and Korea have not yet entered into formal consultations regarding labour rights in Korea. 18 In contrast, Europe commented that in spite of initial difficulties, developments have taken place with respect to these institutional mechanisms, such as the participation of ILO representatives at the CSF since 2015, the participation of both DAG chairs at the meetings of the Committee on Trade and Sustainable Development, and the participation of the Korean Federation of Industry at the 2017 CSF. 17 The most common among companies and business in this respect was no /don t. 18 The CSF was also a topic discussed in the aforementioned assessment submitted by the European Services Forum (which is an active member of the EU DAG). Specifically, the assessment stated that time is required before the CSF become fully functional, and that time is also required for the group to build the necessary confidence and develop a shared understanding of the mandate of the mechanism/the issues to be discussed. It was stated that the effectiveness of the mechanism is expected to pick up, but at the same time, that it is important for recommendations delivered by the mechanism to be taken seriously and followed up upon. The assessment also mentioned the need to discuss and reach a joint understanding on the circumstances that could trigger the use of the government consultation procedure outlined in article of the FTA. Finally, it was also stated that matters relevant for the economic sector have not yet been discussed at the CSF thus far. 11

12 4.13. Impact on consumers All civil society with an indicated that there have been s on Korean and EU consumers due to trade between the EU and Korea since the application of the EU-Korea FTA. The majority of companies and business with an also indicated that there have been s in this respect. In terms of specific s on consumers in Korea, the majority of companies, business, and academic respondents with an indicated either very or slightly s on the prices of goods and services and the choice/availability of goods and services following the application of the EU-Korea FTA. tended to view neutral s in these areas. s in all groups were divided in their views on versus s in other areas, such as safety of goods and services and protection/enforcement of consumer rights. The price and choice of goods and services were also viewed as areas in which s were observed in the EU (no clear patterns among stakeholder groups were observed here). It should also be noted that very s in the areas of quality, sustainability, and safety of goods and services, information available to consumers, protection and enforcement of consumer rights, and consumer trust in enforcement and redress mechanisms were noted by two EU civil society. In contrast, several respondents commented that it is difficult to assess the specific of the EU-Korea FTA on consumers. In particular, the vzbv a German consumer organisation stated that consumer are not in the position and do not have the means to assess the consequences of FTAs on consumers Trade and sustainable development Approximately half of respondents with a view (a mix of all stakeholder groups) indicated that EU-Korea trade has contributed either very much or moderately to economic development, social development and environmental protection, with the other half indicating that EU-Korea trade did not contribute to these aspects of sustainable development Social s The majority of business and companies with an indicated that there have not been social s (e.g. related to labour rights, employment, wages, genderrelated issues, etc.) due to trade between the EU and Korea. with a view were split, with approximately half indicating that there have been social s, and the other half indicating there have been no such s. 19 In terms of specific social s in Korea, two respondents (an EU business association and a Korean NGO) indicated either a very or slightly on employment (in terms of of jobs), household incomes, freedom of association/effective recognition of the right to collective bargaining, elimination of all forms of forced or compulsory labour, effective abolition of child labour, social dialogue, and gender related issues. For the EU, one respondent (an EU trade union) noted a slightly on freedom of association/effective recognition of the right to collective bargaining, elimination of discrimination in respect of employment and occupation, social dialogue, and gender-related issues. In contrast, two respondents (an EU NGO and an EU 19 It should be noted that the most frequent concerning social s in the EU and Korea was don t across all stakeholder groups. 12

13 consumer organisation) indicated a slightly or very on social dialogue, employment ( of jobs), social protection and poverty reduction in the EU Environmental s The majority of businesses and companies and all academic respondents with an indicated that there have not been environmental s in the EU and Korea since the application of the EU-Korea FTA, whereas the majority of civil society with an viewed that there have been such s. 20 For Korea, one EU company commented on higher quality EU products imported into Korea having longer endurance. Three respondents indicated either a slightly or very on air pollution. Concerning the latter, ClientEarth and Transport & Environment brought up the s of e.g. exports of diesel vehicles to Korea in light of the recent findings concerning the manipulation of emission control systems in diesel cars. For the EU, two EU civil society also noted s with respect to waste, energy use and mix, water resources, and transport Human rights s The majority of respondents with a view (a mix of all stakeholder groups) indicated that there have not been human rights s (e.g. regarding non-discrimination) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011, neither in Korea nor in the EU. 21 One respondent (an EU NGO) who did indicate such s also provided feedback on specific s in the EU. Specifically, this respondent indicated slightly s on the right to work and the right to non-discrimination and equality Closing questions Additional comments/issues that respondents further elaborated upon in the last section of the consultation included: 22 Harmonising product certifications and product testing procedures would be ideal The process of applying for approved exporter status should be simplified Rules of origin should be simplified and made more flexible The FTA may have s on employment Some of the main improvements resulting from the EU-Korea FTA listed by respondents included: Creation of an institutional framework to address regulatory and other issues Tariff elimination Increased trade between the Parties Introduction of a chapter on trade and sustainable development 20 The most common across stakeholder groups with respect to whether there have been environmental s was don t. 21 The most common across stakeholder groups with respect to whether there have been human rights s was don t. 22 Detailed comments for all free-text questions in this section are provided in the annex. 13

14 The most problematic areas of the EU-Korea FTA listed by respondents included: Functioning of the institutional set-up Inadequate enforcement of social/environmental/human rights standards Increased administrative burden Continued existence of non-tariff barriers Origin declarations and supporting documents The majority of respondents across all stakeholder groups indicated that they see a need to improve the FTA. Some improvements cited included: Clarifying/improving the functioning of origin declarations and supporting documents Eliminating non-tariff barriers Including provisions regarding regulatory cooperation Simplifying/improving rules of origin Strengthening provisions/enforcement of social/environmental/human rights standards Strengthening the institutions of the Chapter on Trade and Sustainable Development 5. SUMMARY OF RESULTS OF THE SURVEY ON SMES 5.1. General questions As mentioned previously, six s were received for this survey. One respondent had 1-9 employees, another had employees, and the other four indicated had 250 or more employees. Represented sectors included manufacturing, retail trade, and agriculture. All respondents were aware of the EU-Korea FTA. Three respondents indicated that access to the Korean market for EU goods had either very much improved or slightly improved since the application of the EU-Korea FTA, and three indicated that market access remained the same. Four indicated that access to the EU market for Korean goods had very much improved, and two selected no /don t. Three respondents indicated a very with respect to the effect of the EU- Korea FTA on their sector of production, and the other three respectively selected slightly, neutral, and no /don t. One respondent (operating in the chemicals sector) that indicated a very stated that EU chemical producers cannot compete in terms of price against cheaper Korean imports. Another respondent in the metals sector had a similar comment regarding low-priced Korean products Trade activities with Korea Four respondents are currently involved in trade (only exports) with Korea. Of these four, three began exporting to Korea before the application of the EU-Korea FTA in 2011, and one began exporting to Korea after Only one company has made use of the tariff preferences under the EU-Korea FTA; two don t if they have used the tariff preferences, and one has not. When asked to specify the main benefits resulting from the EU-Korea FTA, three of the companies that export to Korea cited increased exports to Korea/to the EU (compared to exports to other destinations) ; also cited were more opportunities for cross-border investment, higher output of products/services, and higher employment. 14

15 When asked to cite the main challenges in trading with Korea, two companies cited complex customs procedures and lack of transparency regarding trade rules. Also cited were high compliance costs relative to the value of goods exported. The remaining two companies do not intend to engage in trade with Korea. Both companies (in the chemicals and metals sectors, respectively) attributed this to the fact that their products are not competitive in price compared to their counterparts in Korea Customs procedures Two respondents indicated that the costs of dealing with customs procedures when exporting goods to Korea remained the same since the application of the EU-Korea FTA, one indicated that costs decreased slightly, and one selected no /don t. One respondent indicated that the costs of dealing with customs procedures when importing goods from Korea remained the same, one indicated that costs decreased slightly, and two selected no /don t. One respondent indicated that transparency/publication of and access to trade regulations and import or export documentation requirements are specific customsrelated problems in Korea Trade barriers Two respondents indicated that they observed non-tariff barriers in Korea, highlighting specifically the following barriers: standards and other technical requirements, conformity assessment, labelling and marketing requirements and licensing requirements and prohibitions Other problems Two respondents indicated that they encountered problems in terms of fair competition with Korean companies. One of these companies indicated that the latter problem led to moderately significant costs. Specifically, this company reported they had received approval from the Korea Customs Service to establish a bonded warehouse in Korea. Work on the warehouse had already commenced when a local customs authority retracted the approval Administrative burdens/compliance costs With respect to administrative burdens related to customs procedures, one respondent indicated decreased slightly since the application of the EU-Korea FTA, two indicated remained the same, and one had no. With respect to other administrative burdens and substantive compliance costs, three respondents selected remained the same and one selected no /don t Closing questions Four of the six respondents indicated that there is a need to improve the EU-Korea FTA (from the farming and manufacturing sectors), while one respondent (from the retail trade sector) indicated that there is no such need. The remaining respondent had no. One respondent s suggestion for improvement was for the EU to take more action against dumping. 15

16 ANNEX The tables in this Annex break down s to the public consultation and survey on consumers by respondent type. For this purpose, respondent types are grouped into the following four categories: 1), 2) Companies, 3) (comprising consumer, trade unions, NGOs), and 4) (comprising private individuals and academic/research institutions). The two respondents that had indicated 'other' were reassigned to the group that best suited them. In the tables, percentages should be read horizontally, as they correspond to breakdowns within each respondent. Additionally, this Annex provides graphical representations of the results of the public consultation and survey on consumers. Tables and figures are presented in the same order they appear in the main report above. Table 1: Responses by of respondent Type of respondent Public consultation Survey on consumers Survey on SMEs Citizen/private individual Company /professional association Consumer organisation/association Public administration Trade Union NGO Consultancy/law firm/professional services Academic/research institution Other

17 Table 2: Responses by country Country Public consultation Survey on consumers Austria Belgium/EU-level Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovak Republic Slovenia Spain Sweden United Kingdom Korea Other country Survey on SMEs 17

18 Figure 1: Type of company Question: Does your company belong to another company or group of companies? Figure 2: Size of company Question: What is the of employees of your company? 18

19 Figure 3: Sectors of operation for companies and business Question: In which sector does your company/do your member companies operate? te: Multiple answers were permitted. Figure 4: Awareness of the EU-Korea FTA Question: Were you aware of the existence of an FTA between the EU and Korea? 19

20 Table 3: Awareness of the EU-Korea FTA Yes Companies Question: Were you aware of the existence of an FTA between the EU and Korea? Base: all respondents to the public consultation and the survey on consumers. te: the largest in each row is bolded. Figure 5: Benefits of the EU-Korea FTA for companies Question: Based on your experience, please specify the main benefits resulting from the EU-Korea FTA for your company/your member companies. te: Multiple answers were permitted. 20

21 Figure 6: Involvement in EU-Korea Trade Question: Are you/your member companies currently involved in trade between the EU and Korea? Figure 7: Cross-border investments in the EU and Korea Question: Do you/your member companies currently have cross-border investments in the EU or Korea? 21

22 Figure 8: Use of tariff preferences under the EU-Korea FTA Question: Have you made use of the tariff preferences under the EU-Korea FTA? Figure 9: Market access for goods under the EU-Korea FTA Questions: Has access to the Korean market for EU goods improved since the application of the EU-Korea FTA in 2011? Has access to the EU market for Korean goods improved since the application of the EU-Korea FTA in 2011? 22

23 Table 4: Access to the Korean market for EU goods much improved improved Remained the same worse much worse /don t Companies Question: Has access to the Korean market for EU goods improved since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 5: Access to the EU market for Korean goods much improved improved Remained the same worse much worse /don t Companies Question: Has access to the EU market for Korean goods improved since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 23

24 Figure 10: Costs of customs procedures under the EU-Korea FTA Question: Have the costs of dealing with customs procedures when exporting goods (e.g. wage costs, fees) decreased since the application of the EU-Korea FTA in 2011? Table 6: Costs of customs procedures when exporting from the EU to Korea Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: Have the costs of dealing with customs procedures when exporting goods (e.g. wage costs, fees) decreased since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 24

25 Table 7: Costs of customs procedures when exporting from Korea to the EU Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: Have the costs of dealing with customs procedures when exporting goods (e.g. wage costs, fees) decreased since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Figure 11: Time required for customs clearance under the EU-Korea FTA Question: Has the time required for customs clearance when exporting goods decreased since the application of the EU- Korea FTA in 2011? 25

26 Table 8: Time required for customs clearance under the EU-Korea FTA when exporting from the EU to Korea Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: Has the time required for customs clearance when exporting goods decreased since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. Table 9: Time required for customs clearance under the EU-Korea FTA when exporting from Korea to the EU Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: Has the time required for customs clearance when exporting goods decreased since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. 26

27 Figure 12: Problems concerning customs procedures under the EU-Korea FTA in Korea Question: Have you observed problems concerning customs procedures in the following areas? te: Multiple answers were permitted. 27

28 Figure 13: Problems concerning customs procedures under the EU-Korea FTA in the EU Question: Have you observed problems concerning customs procedures in the following areas? te: Multiple answers were permitted. Figure 14: Costs due to customs procedures under the EU-Korea FTA Question: Have the problems you indicated above led to any costs for you? 28

29 Figure 15: Significance of costs due to customs procedures Question: If you answered yes, please indicate how significant these costs are. Figure 16: Satisfaction with customs-related provisions of the EU-Korea FTA 29

30 Table 10: Satisfaction with approved exporter status satisfied Rather satisfied Rather not satisfied t at all satisfied / don t Companies Question: How satisfied are you with the functioning of the following customs-related provisions of the EU-Korea FTA? te: the largest in each row is bolded. Table 11: Satisfaction with rules of origin satisfied Rather satisfied Rather not satisfied t at all satisfied / don t Companies Question: How satisfied are you with the functioning of the following customs-related provisions of the EU-Korea FTA? te: the largest in each row is bolded. 30

31 Table 12: Satisfaction with direct transport satisfied Rather satisfied Rather not satisfied t at all satisfied / don t Companies Question: How satisfied are you with the functioning of the following customs-related provisions of the EU-Korea FTA? te: the largest in each row is bolded. Table 13: Satisfaction with administrative cooperation satisfied Rather satisfied Rather not satisfied t at all satisfied / don t Companies Question: How satisfied are you with the functioning of the following customs-related provisions of the EU-Korea FTA? te: the largest in each row is bolded. 31

32 Table 14: Satisfaction with duty drawback satisfied Rather satisfied Rather not satisfied t at all satisfied / don t Companies Question: How satisfied are you with the functioning of the following customs-related provisions of the EU-Korea FTA? te: the largest in each row is bolded. Table 15: Satisfaction with allocation of tariff-rate quotas satisfied Rather satisfied Rather not satisfied t at all satisfied / don t Companies Question: How satisfied are you with the functioning of the following customs-related provisions of the EU-Korea FTA? te: the largest in each row is bolded. Figure 17: n-tariff barriers under the EU-Korea FTA Question: Have non-tariff barriers when exporting goods decreased since the application of the EU-Korea FTA in 2011? 32

33 Table 16: n-tariff barriers for EU exporters due to Korean measures Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: Have non-tariff barriers when exporting goods decreased since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 17: n-tariff barriers for Korean exporters due to EU measures Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: Have non-tariff barriers when exporting goods decreased since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 33

34 Figure 18: Specific non-tariff barriers affecting EU-Korea trade NTBs in Korea Question: Have you observed any of the following non-tariff barriers affecting EU-Korea trade when exporting goods? Figure 19: Specific non-tariff barriers affecting EU-Korea trade NTBs in the EU Question: Have you observed any of the following non-tariff barriers affecting EU-Korea trade when exporting goods? 34

35 Figure 20: Causes of non-tariff barriers under the EU-Korea FTA Question: If you indicated at least one non-tariff barrier above, please specify its cause. Figure 21: Costs due to non-tariff barriers under the EU-Korea FTA Question: Have the problems you indicated above led to any costs for you? 35

36 Figure 22: Significance of costs due to non-tariff barriers Question: If you answered yes, please indicate how significant these costs are. Figure 23: Environment for EU-Korea direct investments Question: Has the environment for EU-Korea direct investments improved since the application of the EU-Korea FTA? 36

37 Table 18: Environment for EU direct investments in Korea much improved improved Remained the same worse much worse /don't Companies Question: Has the environment for EU-Korea direct investments improved since the application of the EU-Korea FTA? te: the largest in each row is bolded. Table 19: Environment for Korean direct investments in the EU much improved improved Remained the same worse much worse /don't Companies Question: Has the environment for EU-Korea direct investments improved since the application of the EU-Korea FTA? te: the largest in each row is bolded. 37

38 Figure 24: Market access for services under the EU-Korea FTA Questions: Has access to the Korean market for EU services improved since the application of the EU-Korea FTA in 2011? Has access to the EU market for Korean services improved since the application of the EU-Korea FTA in 2011? Table 20: Access to the Korean market for EU services much improved improved Remained the same worse much worse /don't Companies Question: Has access to the Korean market for EU services improved since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 38

39 Table 21: Access to the EU market for Korean services much improved improved Remained the same worse much worse /don't Companies Question: Has access to the EU market for Korean services improved since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Figure 25: Problems concerning trade in services between the EU and Korea in Korea Question: Have you observed any of the following problems concerning trade in services between the EU and Korea? te: Multiple answers were permitted. 39

40 Figure 26: Trade in animals/animal products under the EU-Korea FTA ` Question: Has trade between the EU and Korea in animals and animal products become easier since the application of the EU-Korea FTA in 2011? Table 22: Trade in EU animals/animal products with Korea Much easier than before easier than before Remained the same more difficult Much more difficult /don't Companies Question: Has trade between the EU and Korea in animals and animal products become easier since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 40

41 Table 23: Trade in Korean animals/animal products with the EU Much easier than before easier than before Remained the same more difficult Much more difficult /don't Companies Question: Has trade between the EU and Korea in animals and animal products become easier since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Figure 27: Problems concerning trade in animals/animal products in Korea Question: Have you observed any of the following problems concerning trade in animals and animal products between the EU and Korea? te: Multiple answers were permitted. 41

42 Figure 28: Trade in plants/plant products under the EU-Korea FTA Question: Has trade between the EU and Korea in plants and plant products become easier since the application of the EU- Korea FTA in 2011? Table 24: Trade in EU plants/plant products with Korea Much easier than before easier than before Remained the same more difficult Much more difficult /don't Companies Question: Has trade between the EU and Korea in plants and plant products become easier since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. 42

43 Table 25: Trade in Korean plants/plant products with the EU Much easier than before easier than before Remained the same more difficult Much more difficult /don't Companies Question: Has trade between the EU and Korea in plants and plant products become easier since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. Figure 29: Protection of IPR under the EU-Korea FTA Question: Has the protection of intellectual property rights in the EU and Korea improved since the application of the EU- Korea FTA in 2011? 43

44 Table 26: Protection of EU IPR in Korea much improved improved Remained the same worse much worse /don't Companies Question: Has the protection of intellectual property rights in the EU and Korea improved since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. Table 27: Protection of Korean IPR in the EU much improved improved Remained the same worse much worse /don't Companies Question: Has the protection of intellectual property rights in the EU and Korea improved since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. 44

45 Figure 30: Problems concerning IPR in Korea Question: Have you observed any problems in the following areas concerning the protection/enforcement of intellectual property rights? te: Multiple answers were permitted. Figure 31: Access to public tenders under the EU-Korea FTA Question: Has access to public tenders for EU suppliers in Korea/Korean suppliers in the EU improved since the application of the EU-Korea FTA in 2011? 45

46 Table 28: Access to public tenders for EU suppliers in Korea much improved improved Remained the same worse much worse /don't Companies Question: Has access to public tenders for EU suppliers in Korea/Korean suppliers in the EU improved since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 29: Access to public tenders for Korean suppliers in the EU much improved improved Remained the same worse much worse /don't Companies Question: Has access to public tenders for EU suppliers in Korea/Korean suppliers in the EU improved since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 46

47 Figure 32: Problems concerning public procurement in Korea Question: Have you observed any of the following problems concerning public procurement in Korea/in the EU? te: Multiple answers were permitted. Figure 33: Free and undistorted competition under the EU-Korea FTA Question: Has free and undistorted competition in the EU and Korean economies improved since the application of the EU- Korea FTA in 2011? 47

48 Table 30: Competition in the Korean economy much improved improved Remained the same worse much worse /don't Companies Question: Has free and undistorted competition in the EU and Korean economies improved since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. Table 31: Competition in the EU economy much improved improved Remained the same worse much worse /don't Companies Question: Has free and undistorted competition in the EU and Korean economies improved since the application of the EU- Korea FTA in 2011? te: the largest in each row is bolded. 48

49 Figure 34: Problems concerning competition in Korea Question: Have you observed any problems in the following areas? te: Multiple answers were permitted. Figure 35: Regulatory changes made to implement the EU-Korea FTA Question: In your view, have the EU and Korea made regulatory changes in the sector/area relevant to you to implement commitments from the EU-Korea FTA? 49

50 Table 32: Regulatory changes made in Korea Yes, fully Yes, partly, required regulatory changes have not been made regulatory changes were needed in the sector/ area relevant to me Don t Companies Question: In your view, have the EU and Korea made regulatory changes in the sector/area relevant to you to implement commitments from the EU-Korea FTA? te: the largest in each row is bolded. Table 33: Regulatory changes made in the EU Yes, fully Yes, partly, required regulatory changes have not been made regulatory changes were needed in the sector/ area relevant to me Don t Companies Question: In your view, have the EU and Korea made regulatory changes in the sector/area relevant to you to implement commitments from the EU-Korea FTA? te: the largest in each row is bolded. 50

51 Figure 36: FTA provisions for which regulatory changes have not been made Korea Question: If you have indicated that required regulatory changes were not made or were only partly made, to which FTA provisions do they relate? te: Multiple answers were permitted. Figure 37: FTA provisions for which regulatory changes have not been made the EU Question: If you have indicated that required regulatory changes were not made or were only partly made, to which FTA provisions do they relate? te: Multiple answers were permitted. 51

52 Figure 38: Administrative burdens/compliance costs associated with EU-Korea trade Question: How have the administrative burdens/compliance costs associated with EU-Korea trade been affected since the application of the EU-Korea FTA in 2011? Table 34: Administrative burdens related to customs procedures Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: How have the administrative burdens/compliance costs associated with EU-Korea trade been affected since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 52

53 Table 35: Other administrative burdens Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: How have the administrative burdens/compliance costs associated with EU-Korea trade been affected since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 36: Substantive compliance costs Decreased very much Decreased slightly Remained the same Increased slightly Increased very much /don t Companies Question: How have the administrative burdens/compliance costs associated with EU-Korea trade been affected since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 53

54 Figure 39: Contributions of DAGs/CSF to the implementation of the TSD chapter Question: Have the domestic advisory groups and the forum contributed to the implementation of the trade and sustainable development chapter by advising on relevant issues? Table 37: Contributions of the EU DAG to the implementation of the TSD chapter Contributed very much Contributed moderately Did not contribute /don't Companies Question: Have the domestic advisory groups and the civil society forum contributed to the implementation of the trade and sustainable development chapter by advising on relevant issues? te: the largest in each row is bolded. 54

55 Table 38: Contributions of the Korean DAG to the implementation of the TSD chapter Contributed very much Contributed moderately Did not contribute /don't Companies Question: Have the domestic advisory groups and the civil society forum contributed to the implementation of the trade and sustainable development chapter by advising on relevant issues? te: the largest in each row is bolded. Table 39: Contributions of the CSF to the implementation of the TSD chapter Contributed very much Contributed moderately Did not contribute /don't Companies Question: Have the domestic advisory groups and the civil society forum contributed to the implementation of the trade and sustainable development chapter by advising on relevant issues? te: the largest in each row is bolded. 55

56 Figure 40: Problems concerning the EU DAG Question: Have you observed any of the following problems concerning these institutions? te: Multiple answers were permitted. Figure 41: Problems concerning the Korean DAG Question: Have you observed any of the following problems concerning these institutions? te: Multiple answers were permitted. 56

57 Figure 42: Problems concerning the CSF Question: Have you observed any of the following problems concerning these institutions? te: Multiple answers were permitted. Figure 43: Impacts on consumers Question: Have there been s on consumers (e.g. on prices, choice, safety of goods) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? 57

58 Figure 44: Impacts on consumers in Korea Table 40: Impacts on consumers in Korea Yes Don t Companies Question: Have there been s on consumers (e.g. on prices, choice, safety of goods) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 58

59 Table 41: Impacts on consumers in the EU Yes Don t Companies Question: Have there been s on consumers (e.g. on prices, choice, safety of goods) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 42: Prices of goods or services in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. 59

60 Table 43: Choice/availability of goods or services in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. Table 44: Quality of goods or services in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. 60

61 Table 45: Safety of goods or services in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. Table 46: Sustainability of goods or services in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. 61

62 Table 47: Information available to consumers in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. Table 48: Protection and enforcement of consumer rights in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. 62

63 Table 49: Vulnerable consumers in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. Table 50: Consumer trust in enforcement and redress mechanisms in Korea Neutral /don t Companies Question: Please specify the on consumers in Korea. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in Korea. te: the largest in each row is bolded. 63

64 Figure 45: Impacts on consumers in the EU Table 51: Prices of goods or services in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. 64

65 Table 52: Choice/availability of goods or services in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. Table 53: Quality of goods or services in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. 65

66 Table 54: Safety of goods or services in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. Table 55: Protection and enforcement of consumer rights in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. 66

67 Table 56: Sustainability of goods or services in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. Table 57: Information available to consumers in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. 67

68 Table 58: Vulnerable consumers in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. Table 59: Consumer trust in enforcement and redress mechanisms in the EU Neutral /don t Companies Question: Please specify the on consumers in the EU. (te: A refers to a change due to the FTA that is beneficial for consumers, e.g. increased choice, lower prices, etc.) Base: all respondents to the public consultation and survey on consumers who indicated s on consumers in the EU. te: the largest in each row is bolded. 68

69 Figure 46: Impact on sustainable development Question: Has EU-Korea trade contributed to sustainable development (in terms of promoting economic and social development and environmental protection) since the application of the EU-Korea FTA in 2011? Table 60: Contribution of EU-Korea trade to economic development Contributed very much Contributed moderately Did not contribute /don t Companies Question: Has EU-Korea trade contributed to sustainable development (in terms of promoting economic and social development and environmental protection) since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 69

70 Table 61: Contribution of EU-Korea trade to social development Contributed very much Contributed moderately Did not contribute /don t Companies Question: Has EU-Korea trade contributed to sustainable development (in terms of promoting economic and social development and environmental protection) since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 62: Contribution of EU-Korea trade to environmental protection Contributed very much Contributed moderately Did not contribute /don t Companies Question: Has EU-Korea trade contributed to sustainable development (in terms of promoting economic and social development and environmental protection) since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Figure 47: Social s Question: Have there been social s (e.g. related to labour rights, employment, wages, gender-related issues, etc.) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? 70

71 Table 63: Social s in Korea Yes Don t Companies Question: Have there been social s (e.g. related to labour rights, employment, wages, gender-related issues, etc.) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? Base: all respondents to the public consultation and the survey on consumers. te: the largest in each row is bolded. Table 64: Social s in the EU Yes Don t Companies Question: Have there been social s (e.g. related to labour rights, employment, wages, gender-related issues, etc.) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? Base: all respondents to the public consultation and the survey on consumers. te: the largest in each row is bolded. 71

72 Table 65: Specific social s in Korea Social Employment (# of jobs) Household incomes Freedom of association Elimination of forced/ compulsory labour Effective abolition of child labour Social dialogue Genderrelated issues Employment (quality of jobs) Neutral /don t Wages Transition from informal to formal employment Elimination of discrimination in respect of employment/ occupation Social protection Poverty reduction Other Question: Please specify the on the following areas in Korea. (te: A refers to a change due to the FTA that is beneficial in terms of social development, e.g. improved quality of jobs, reduced poverty, etc.) Base: all respondents to the public consultation and survey on consumers who indicated social s in Korea. te: the largest in each row is bolded. 72

73 Table 66: Specific social s in the EU Social Household incomes Freedom of association Elimination of discrimination in respect of employment/ occupation Social dialogue Genderrelated issues Employment (# of jobs) Employment (quality of jobs) Neutral /don t Wages Transition from informal to formal employment Elimination of forced/ compulsory labour Effective abolition of child labour Social protection Poverty reduction Other Question: Please specify the on the following areas in the EU. (te: A refers to a change due to the FTA that is beneficial in terms of social development, e.g. improved quality of jobs, reduced poverty, etc.) Base: all respondents to the public consultation and survey on consumers who indicated social s in the EU. te: the largest in each row is bolded. 73

74 Figure 48: Environmental s Question: Have there been s on the environment (e.g. on pollution, waste, natural resources) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? Table 67: Environmental s in Korea Yes Don t Companies Question: Have there been s on the environment (e.g. on pollution, waste, natural resources) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 68: Environmental s in the EU Yes Don t Companies Question: Have there been s on the environment (e.g. on pollution, waste, natural resources) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. 74

75 Table 69: Specific environmental s in Korea Environmental Neutral /don t Other Air pollution Waste Energy use and mix Transport Water resources Biodiversity (including wildlife) Agricultural fertilisers, land use, soil, and livestock Forests/forest resources Fisheries/fish resources Greening of the economy (including trade in EGS) Question: Please specify the on the environment in Korea. (te: A refers to a change due to the FTA that is beneficial for the environment (e.g. increased biodiversity) and/or leads to a reduced environmental footprint (e.g. less air pollution.) Base: all respondents to the public consultation and survey on consumers who indicated environmental s in Korea. te: the largest in each row is bolded. 75

76 Table 70: Specific environmental s in the EU Environmental Neutral /don t Waste Energy use and mix Water resources Transport Air pollution Agricultural fertilisers, land use, soil, and livestock Greening of the economy (including trade in EGS) Biodiversity (including wildlife) Forests/forest resources Fisheries/fish resources Other Question: Please specify the on the environment in the EU. (te: A refers to a change due to the FTA that is beneficial for the environment (e.g. increased biodiversity) and/or leads to a reduced environmental footprint (e.g. less air pollution.) Base: all respondents to the public consultation and survey on consumers who indicated environmental s in Korea. te: the largest in each row is bolded. Figure 49: Human rights s Question: Have there been s on human rights (e.g. regarding non-discrimination) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? 76

77 Table 71: Human rights s in Korea Yes Don t Companies Question: Have there been s on human rights (e.g. regarding non-discrimination) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 72: Human rights s in the EU Yes Don t Companies Question: Have there been s on human rights (e.g. regarding non-discrimination) due to trade between the EU and Korea since the application of the EU-Korea FTA in 2011? te: the largest in each row is bolded. Table 73: Need to improve the EU-Korea FTA Yes Don t Companies Question: Do you see a need to improve the EU-Korea FTA? te: the largest in each row is bolded. 77

78 Table 74: Comments on other issues concerning EU-Korea trade Topic Harmonisation of product certification and testing Korean state support of shipbuilding industry Lack of information and transparency Negative s on employment Negative s on polyester staple fibres industry due to increased competition n-tariff barriers Rules of origin Tariffs on maintenance, repair, and operations The process of applying for approved exporter status should be simplified Companies Companies academ ia Companies Comment It would be great to harmonise product certifications and product testing measures too. One certificate for all countries. Like the harmonised custom tariff code system. South Korea s support measures to its local shipyards seem to be in violation [of] the subsidies and transparency obligations that South Korea is required to fulfil in the context of [the] EU-South Korea FTA. Moreover, based on information available to SEA Europe, the aforementioned South Korean support measures seem to fall within the scope of subsidies covering debts or liabilities of enterprises and subsidies to insolvent or ailing enterprises. Against this background, SEA Europe would like to reiterate its request for the European Commission to remain extremely vigilant and to continue to raise the issue of Korean state support for its shipyards within the ambit of the consultation mechanism and transparency provisions of the EU-Korea FTA. Lack of information, legislative and authority requirements unclear, trying to shift responsibility and don't give out written statements with which the company could operate with. A view point on jobs is assumed as the degree of imports of PET origination from Korea has highly increased, [which has] put a burden on EU companies. Concerned with pay and conditions of women workers of companies involved. Korea is by far the biggest exporter of polyester staple fibres in the EU in front of Taiwan, China and India. Korea exports tons PES (January-October 2016) including the whole repertoire of TechTex and specialities (which is quite unusual for Asian countries, especially for China and India). The biggest EUcompetitor is the firm Toray Korea, whose business strategy is to conquer the EU/US market with very low prices and become the leader in the production / distribution of polyester Staple fibres, knocking out all other competitors out of the market. More aggressive corrective actions should be taken against discriminatory policy in [the] non-tariff area. Rules on origin could be made simple and flexible in order to maximize the uptake of preferential treatments. The main issue for the EU aeronautical industry is the 8% tariff on Maintenance, Repair, and Operations (MRO) as compared to 0% for the US, which places European manufacturers [at] a competitive disadvantage. Please make regulations for "Approved Exporter" [simpler] especially for small and medium sized companies [...]. Question: If there are any other issues that you would like to comment on in the context of trade and economic relations between the EU and Korea, please elaborate. 78

79 Table 75: Comments on main improvements resulting from the EU-Korea FTA Topic Creation of an institutional framework to address regulatory and other issues Increased trade between the Parties Introduction of a chapter on trade academ ia academ ia Companies Companies Companies Companies Comment Addressing current and future regulatory developments: Thanks to the EU-Korea FTA, both Parties agreed to establish various specialised committees and working groups to effectively seek solutions to market access issues. A specialist SPS Committee was set up to enhance cooperation in the field of sanitary and phytosanitary measures and to find means to solve, reduce or avoid any unnecessary SPS barriers. The FTA also paved the way for enhanced cooperation on specific bilateral trade issues. At the end of 2014, both sides concluded an agreement of equivalency for processed organic food products. Thanks to this agreement organic food products processed and certified in the EU may be sold as organic in Korea as of 1 February Commitment on transparent dialogue between two governments to compromise arguments and solutions on regular basis. The economic collaboration between the two countries improved significantly. Between 2011 and 2015, exports of chemicals to Korea increased by 16% and imports from Korea by 43.2%. In 2015, EU chemical exports to Korea were about million EUR, against million EUR of EU chemical imports from Korea, whereas in 2011 the EU chemical exports and imports to/from Korea respectively amounted to and million EUR. Increase of exports of trade in services in both Parties. Although it is not certain if the increased bilateral trade flows experienced [in] the last five years can be fully attributed to the benefits of the FTA in terms of e.g. tariff eliminations, some European marine equipment manufacturers have experienced developments in terms of increased exports of industrial equipment and machinery to Korea. This agreement was unprecedented in terms of scope and achievements. It has paved the way for a new generation of modern trade agreements. High exports of EU cheese to South Korea. Under the CN code 0406, was exported in 2013; in 2014 and in Increase in exports and new opportunities for European companies. The interacted ease of doing business for both parties. Improved trade possibilities due to a level playing field. Increased business with Korea; Korean distribution of in-house manufactured German products. More efficient / less costly flow of goods. Increasing trading potential. The EU-Korea FTA was the first trade agreement that has a trade and sustainable development chapter though [it is] not yet 79

80 Topic and sustainable development Provisions concerning product labelling Tariff elimination academ ia Comment binding. Better coordination and cooperation among EU and Korean Civil society org-anisations, within the framework of activities related [to] the implementation of the Chapter on Trade and Sustainable Development. From a consumer point of view it is to see that with the EU-Korea agreement there has been consumer-friendly language on product labelling (TBT) which relates to labelling which should be allowed if it is due to consumer wishes. Tariff elimination. ACEA welcomes the conclusion of the FTA [and] fully supports the European Commission's efforts to open up market access opportunities and tackle barriers to trade via trade agreements with third countries. The dismantling of automotive tariffs has improved market access for European manufacturers. In principle, the inclusion of an automotive annex has led to some improvements in terms of EU-Korea regulatory convergence, with some notable exceptions. Reduction of customs duties. The FTA with Korea has brought for the German man-made fibres sector only marginal changes. The FTA means merely for the sector that imports of fibres and filament yarns from Korea into the EU have become cheaper thanks to the abolition of the 4% duty. The FTA makes dumping by Korea consequently more difficult than in the past. The FTA offers considerable advantages over competitors from non-preferential beneficiary countries: tariff savings at least in some cases are higher than the additional costs incurred due to higher documentation requirements and administrative procedures. The biggest improvements are the shortened handling times in import and the corresponding freedom of customs in relation to textiles. Tariff elimination: as part of the FTA, certain high Korean duties on EU food and drink products have been eliminated or will gradually be reduced. This progressive opening of the market creates new export opportunities and the savings from tariff elimination enables EU products to compete better on the Korean market. more import dut[ies] on import[s] into Korea. Companies The main improvement was a drop in EU import duties of 80%. Maybe market access has improved since Korean purchasers that Korean import duties do not apply for European products. We have been able to realize a few sales projects in Korea since Companies Import tariff reduction. Question: What is the main improvement for you resulting from the EU-Korea FTA (if any)? 80

81 Table 76: Comments on the most problematic areas of the EU-Korea FTA Topic Approved exporter status Competition Direct transport Functioning of the institutional set-up Inadequate enforcement of social/ environmental/ human rights standards Inadequate protection of consumer rights Comment Burdensome process to apply for an approved exporter status. Lack of investigation [into] whether Korea is a market economy (according to EU standards). The direct transport rule. Lack of transparency in the regulatory cooperation mechanisms. Regulatory cooperation mechanisms are only consultative and have no real enforcement mechanisms. The cooperation between org-anisations and the governments of the two trading partners through the [CSF] is not working. "Investment chapter (GAT related issues), privatization of services, no binding and enforceable regulations on labour standards and human rights, like the protection of women's rights (it is mentioned, but not with a sanction attached to it). n-ratification of the fundamental ILO Conventions and the actions against certain trade union had a on the country's image among European. Unfortunately it has come to this situation, even though the Korean government committed itself to achieve some progress in this regard, not only due to assumed obligations as [a] member of [the] OECD, but also as signatory party of the EU-Korea FTA. A modern and developed state [such] as Korea inspires many nations, however the Korean government should take care that this image [is] not be replaced by the label of a country where forced labour is tolerated and rights [such] as freedom of association and collective bargaining are not respected. Contrary to the of Korean authorities, the non-ratification of fundamental ILO Conventions not only affects the image of the country in relation to other trade unions and human rights in the world, but it creates the necessary conditions for some governments and companies in the EU to invoke clauses of unfair competition in the implementation of the Free Trade Agreement. The proper development, monitoring, implementation, and enforcement of social and environmental standards and human rights. From a consumer point of view the inclusion of rules of investment protection is generally problematic, especially between two established democratic systems like the European Union and the Republic Korea. Furthermore, as what regards the directly consumer-related rules it is regrettable that the objectives of the agreement do not reflect the goal of "consumer protection" and does not cite it amongst its exception rules. This is important to maintain high safeguards for consumer protection measures to be taken on the national of EU level of government. Furthermore it has not been achieved to agree on tangible consumer benefits such as in the field of e-commerce, redress or personal 81

82 Topic Comment allowances. Increased administrative burden Korean government subsidies Companies Further steps are needed regarding administrative burdens when exporting to Korea. Compliance costs/administrative burden related to customs procedures have increased, especially to prove the origin to secure the preferential treatment of goods. Much more paperwork, but this is acceptable. The FTA consists of important provisions for the European Maritime Technology sector, notably on subsidies (going beyond existing WTO rules) and on transparency. According to these provisions, both Parties are obliged to report annually on the total amount, types and sectoral distribution of subsidies which are specific and which may affect international trade. Moreover, upon request by one Party, the other Party shall provide additional information on any specific subsidy schemes. SEA Europe has in the past requested the European Commission to raise the issue of state support to the Korean shipbuilding industry in the context of EU-Korea FTA implementation. South Korea is however refusing, unfortunately, to provide any meaningful transparency to the industry or to states, e.g. in the context of the OECD Working Party 6 on Shipbuilding. Language barriers Companies Language, sourcing new contacts. Negative s on employment Continued existence of nontariff barriers academ A view point on jobs is assumed as the degree of imports of PET origination from Korea has highly increased and that put a burden on EU companies. Deterioration in conditions and/or pay of women workers. Outstanding technical barriers to trade/ market access barriers in Korea. Although automotive tariffs were fully dismantled by June 2016, non-tariff barriers continue to hamper the market access of EU exports to Korea. As the EU and Korea are both signatories of the UNECE 1958 Agreement, they agreed during the FTA negotiations that an Automotive NTB Annex should form an integral part of the FTA, with the view of recognizing UNECE as the relevant standard setting body for both partners. On that basis, ACEA members expected that the list of UN Regulations in the Automotive Annex and its Appendices would be fully recognised by the Korean authorities when the FTA would enter into force. This has not been the case. Today, EU manufacturers still have to go through many of the same local certification procedures in Korea as before the signature of the FTA. Harmonisation to international standards was one of the main objectives of the FTA from the perspective of the automobile industry. During the 5 years of implementation of the FTA, Korea has adopted a of new technical requirements which are not fully harmonised with the UN Regulations. Still, there are special Korean testing and certification procedures that must be observed, despite global procedures for the mutual recognition of test results. Discrimination on pricing and reimbursement polic[ies] in [the] pharmaceutical sector. 82

83 Topic Origin declarations and supporting documents Overall implementation of the FTA Remaining tariffs ia Companies Companies Comment There is a risk in origin imports. Imagine you are a trader (low margin) in the EU, buying from Korean suppliers. You use your buying power and as a result, a supplier in Korea goes bust. His revenge: he sends you updates of all commercial invoices of the last few years, withdrawing the status "Korean origin" for all products. Then you have to tell that local customs, who will claim a huge sum from you at once. This might ruin you. Would like to elaborate on our comments regarding difficulties with providing correct documents when exporting goods with preferential origin according to the FTA. We have experienced some confusion regarding preferential origin and validity of long term supplier declarations. If a producer has issued a declaration with validity of one year and we have supporting supplier invoices showing that we bought these products during this period we still have had some issues if we've been exporting to Korea on [a] later date than the validity of the supplier declaration. Some authorities are (and some are not) under the impression that the long term supplier declaration should be valid on the export date. But if we buy products and then have them on stock in a warehouse before exporting is it really correct that our producer should issue a new supplier declaration for stock items? We have received different answers from different authorities which makes it difficult to handle correctly. We would like a clarification to the agreement on how this should be handled. Also, when Korean customs have controlled some shipments, they are looking at the issue date of the invoice to our customer rather than the export date of the goods. In some cases we have issued the invoice weeks ahead of export date and before we received production invoice and long term supplier declaration from our suppliers. This has led to additional dut[ies] for our Korean importer since Korean customs say that this invoice issued earlier than invoices and declaration from producers and that is not accepted. We think that they should always look on the date for export and not on the issue date of our documents. Problems in its implementation have been encountered and progress needs to be made so that the agreement can deliver as expected and is not an empty box. The opportunity to modernise the agreement should be used to not only enhance the scope to other areas but also to address implementation of existing commitments. The EU-Korea FTA eliminates tariffs in a progressive approach. The majority of import duties were already removed in 2011 when the FTA took effect. The remaining tariff barriers should have been removed by July 2016, according to the European Commission s website. Today, the EU aeronautical industry still faces an imposed tariff of 8% on aircraft MRO as compared to 0% tariff for the US. The fact that there is no level playing field among Europe and US makes European manufacturers less competitive. This is an issue of common interest to both sides, given its importance for the Korean airlines (if the Korean airlines send a part to be repaired in Europe, when it is returned, the airlines will have to pay customs duties as well as the repair charges; conversely, if the same part is send to the US for repairs, the airlines will not pay customs duties, 83

84 Topic Comment based on [the] Korea-US FTA). Sources: Own compilation, based on the public consultation on the EU-Korea FTA, survey on consumers. Question: In your view, which are the most problematic areas of the EU-Korea FTA (if any)? Table 77: Comments on how the EU-Korea FTA should be improved Topic Addressing competition issues Clarifying/ improving the functioning of origin declarations and supporting documents Clarifying/ improving the functioning of origin declarations and supporting documents Eliminating NTBs Eliminating the direct transport Companies Companies Companies Comment "There should be some protection for EU manufacturers as far as "local support" to Korean producers is concerned." "The administrative requirements for the proof of origin should be lowered." "1) On electronic circuit boards: with the progression of the international division of labour, meeting origin criteria is getting harder. Therefore the hurdles should be lowered. My experience with origin calculations: The most expensive component of an electronic device usually is the circuit board. Like many EU manufacturers, we need small quantities custom made and order them here. Our EU suppliers never can state EU origin though the boards get equipped here, because all the bird feed on the boards comes from Asia. If assembling alone of such boards would lead to EU origin, that would turn many products into EU origin. Unfortunately, boards don't have their own position, they are often hidden in the TARIC system, like those for camera boards: And for Pos. 8529, the rule is max. 50% non- EU material. With assembling being done by highly productive machines, the EXW price is not more than 100% above the material cost. Maybe there's a solution for this. 2) On the origin statement on a commercial invoice: "...except where otherwise clearly indicated" But how? An example would be nice. If I want to mark non-eu origin products, I can use (*) or "other" in an origin column or write "non-preferential origin (CA)". Sometimes such comments lead to trouble. Please provide a nonbinding guidance document, giving a few examples. That would be nice for newbies and make it easier to read for officials who have to work with it." "Clarification of issue dates of supplier declarations and other supporting documents." "Elimination of outstanding NTBs and expansion of the scope of the Automotive Annex [ ]." (See the case study on the automotive sector in the interim technical report of this evaluation for more detail.) "There needs to be an increased focus on resolving outstanding non-tariff barriers, to ensure that exporters can derive the maximum benefit possible from the deal." "It should eliminate the issues highlighted above on direct transportation rules" 84

85 Topic provision Including provisions regarding consumer protection Including provisions regarding data protection and digital VAT practices Including provisions regarding investment protection Including provisions regarding regulatory cooperation Increasing frequency of dialogue Providing alternatives to approved exporter status Removing the MRO tariff Simplifying/ improving rules of origin academ ia Comment "Stronger references to consumer protection and tangible benefits for consumers, enabling a participation of consumer representatives in the agreement's advisory group" "As digital markets are by their nature global rather than regional, EGDF believes it to be crucial for the European Union to try to minimize the fragmentation of the digital markets by pushing joint standards on consumer protection, data protection and digital VAT practices on a global level. The current EU-Korea FTA fails to address many of these challenges." "Inclusion of investment protection" "As mentioned before the EU should push for a clause which prevents Korea [from] implementing further additional technical requirements and asking for a third-party mandatory certification without consulting the EU. EU should convince Korea to put more energy in the market surveillance process, which at the end of the day will create a [safer] working and production environment in Korea." "As mentioned, the EU should ask for the insertion of a regulatory cooperation clause. Korea should not be able to implement further additional technical requirements, by asking for a third party mandatory certification without consulting the EU. [The] EU should encourage Korea to strengthen their market surveillance mechanism, which will truly enhance the working and production processes in Korea." "A regulatory cooperation clause is needed. Korea should not be able to implement further additional technical requirements, by asking for a third party mandatory certification without consulting the EU. The] EU should encourage Korea to strengthen their market surveillance mechanism, which will truly enhance the working and production processes in Korea." "Increase frequency of mutual dialogue to remove grey zones and upgrade the wording of the FTA if needed." "Status of AE should not be [the] only possibility. In any case, it should also be possible to import goods preferentially outside the agreement, i.e. without the AE status, on the basis of e.g. movement certificates." "From the EU aeronautical industry s perspective, the priority would be to remove the MRO tariff. However, until then, the suspension of the tariff should be extended." "Rules of origin should have the same standards which [were] negotiated for the FTA EU-Japan [ ]." "Improvement of regulatory cooperation and customs procedures including rules of origin" 85

86 Topic Strengthening provisions/ enforcement of social/ environmental/ human rights standards Strengthening the institutions of the TSD chapter Comment Question: Please explain how you think the EU-Korea FTA should be improved. "We would appreciate having a discussion with the European Commission to see how the FTA can be modified in order to either alleviate the RoO for diamonds (e.g. allowing sorting and grading to be sufficient to obtain EU preferential origin) or to allow diamonds exported from the EU to benefit from the tariff reductions of the FTA (0%), even though the goods don't have the preferential origin. We strongly believe that in this case both the EU and Korea would benefit from such an approach. Korea for example doesn't have a local polishing industry, so there's no disruption of the internal market. They do have jewellery manufacturers however, who would clearly benefit from lower prices as a result of the abolition of the 5% import tax. Allowing European diamonds to compete in a free and fair way with diamonds exported by India would also benefit the Korean jewellery industry: diversity of supply will increase and prices will decline. " "Include enforceable labour standards with economic sanctions, reduced privatization and liberalisation of investment sector; stop opening up public procurement, this should be decided per policy, not used to apply as overall policy." "More meaningful commitments in the field of environment, proper monitoring and enforcement of the trade and sustainable development chapter." "It is obvious that the application of the general dispute settlement of the FTA to the trade and sustainable development chapter is needed to reach the necessary ratification, implementation and effective application of at least the 8 ILO core conventions. The involvement of all Korean trade unions in the consultation processes is necessary and must be secured by a binding follow up mechanism." "There is a need to ensure that recommendations provided by the org-anisations mechanism are seriously taken and followed up by the political authorities. Similarly, there is a need to discuss and reach a joint understanding (on the whole EU side) on the circumstances which could trigger the use of the Government consultation procedure envisaged in Article par. 1 of the EU- Korea FTA." 86

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