April 6, 2009

EU, South Korea, hold off on trade deal

South Korean and European Union officials said an expected trade agreement would have to wait another month, due to disagreements on tariff duty drawbacks.

Although a final agreement was expected, a meeting between trade representatives in London failed to conclude with a document ready to sign, Yonhap News reported Monday.

South Korea wants tariff duties returned to companies if the materials used in production were imported, Yonhap said.

We expect both sides to meet again next month to iron out differences on duty drawbacks and other remaining issues, said Lee Hey-min, South Korea's deputy minister for trade.

Lee said South Korea would remain firm on the issue, although it differs from trade agreements the EU has signed with Chile and Mexico.

EU negotiators believe the agreement would favor South Korea, but Lee said the failure to find an accord on the issue severely undermines the effect of tariff reductions.