Writer EU Ambassador "FTA Revision Needed to Expand Trade and Investment"

FKI 'Business Breakfast Meeting with EU Ambassadors to Korea'
"E-commerce Growth Causes FTA to Become Outdated and Lose Relevance"

Michael Reiterer, EU Ambassador to Korea (third from right), is giving a greeting at the "Intergovernmental Consultation on the Implementation of the Korea-EU FTA Trade and Sustainable Development Chapter" held on the 21st at the Courtyard Marriott Namdaemun Hotel in Jung-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Dongwoo Lee] Michael Reiterer, the Ambassador of the European Union (EU) to Korea, met with domestic business leaders on the 12th and stated, “It is necessary to revise the Free Trade Agreement (FTA) to expand trade and investment between Korea and the EU.”

At a business breakfast meeting hosted by the Federation of Korean Industries (FKI) that morning, Ambassador Reiterer said, “The Korea-EU FTA, which will mark its 10th anniversary next year, does not sufficiently reflect the realities of new technologies, industries, and markets.” He added, “Since the FTA came into effect in 2011, both sides have experienced remarkable growth, but as e-commerce grows, the FTA is becoming outdated and losing relevance.”

He emphasized the need for a strengthened FTA revision, stating, “A modernized FTA could include provisions for investment facilitation, commitments to comply with the Paris Agreement on climate change, and enhanced cooperation to promote small and medium-sized enterprises (SMEs) and startups.”

Ambassador Reiterer explained that a modernized FTA is highly relevant to changes that need to be adopted following the COVID-19 pandemic. He said, “The current economic disruption will change many aspects of how we do business. Leveraging the opportunities of the digital economy and technology is crucial for economic growth in the post-pandemic era.”

Korean business leaders proposed three major economic cooperation tasks to the EU: easing entry and exit and air travel restrictions through a business fast-track measure, supporting Korean companies operating in Europe affected by COVID-19, and establishing a won-euro currency swap agreement. They particularly emphasized the need to build economic and financial safety nets for both sides through the won-euro currency swap.

Kwon Tae-shin, Vice Chairman of the FKI, said, “I hope economic cooperation between Korea and the Eurozone will be upgraded to greater cooperation such as currency swaps beyond individual corporate partnerships.”

He explained, “In order for the two economic zones to wisely overcome unprecedented crises like COVID-19 together, a financial safety net is necessary. Especially, a currency swap with the euro, the second largest key currency accounting for 30% of international payments and financial transactions, is an economic cooperation mechanism needed by Korea’s economy and companies as well as European companies operating in Korea.”

In response, Ambassador Reiterer emphasized that the EU’s border restrictions due to COVID-19 are temporary. He said, “These measures provide an exception list including medical professionals, cross-border workers, transport staff, diplomats, humanitarian aid workers, transit passengers, people requiring international protection, and non-EU citizens.”

Meanwhile, the trade volume between Korea and the EU was $108.6 billion (approximately 132 trillion won) as of last year, with more than 3,200 Korean and European companies operating in both economic zones. In fact, the EU is Korea’s third-largest export and second-largest import partner, while Korea ranks as the EU’s eighth-largest export and seventh-largest import partner. The EU was the top foreign direct investor (FDI) in Korea last year.

The meeting was attended by about 20 representatives from major industry organizations and companies, including Vice Chairman Kwon, Kim Hee-yong, Chairman of Dongyang Moolsan Enterprise, Lee Geon-gi, Chairman of the Overseas Construction Association, Lee Min-chul, Vice Chairman of the Korea Iron & Steel Association, as well as major companies and member firms such as GS Engineering & Construction, Samyang Biopharm, Samsung Electronics, Hyundai Motor Company, and SK Innovation, who raised issues concerning Europe.

This content was produced with the assistance of AI translation services.