The Eu-Korea Free Trade AgreementAdjustments, or so-call improvements, are made on the WTO agreement are in the favor of better adaptation to the situation of the nations involved. Citing the EU-Korea FTA agreement as an example, following shows how the modifications made in the FTA from the WTO agreement better suit the situation of the two countries in three areas – the competition policy regulatory issues, government procurement and intellectual protection.
About the competition policy regulatory issue, the FTA compromises on obeying the international standard, despite being more specific, the new regulation commits to the spirit of the WTO policy, in other words, the changes in FTA is to make the WTO idea practical for the two countries, not really an improvement.
About the government procurement, public works concession and build-operate-transfer (BOT), extending from the WTO agreements, is included in the FTA so as to provide more chance for the European global business leader to cooperate with Korea hence further enhance the openness of the Korea market. If such BOT are applied in the WTO agreement, it may deter some countries from joining the free trade that consider some regions need to be excepted from the agreement to protect important core value or for other reasons. In this case WTO agreement is not covering insufficient area but to be flexible for countries to fit in.
Under intellectual protection area, FTAs protection covers the existing WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS), as well as the unregistered design. Actually TRIPS is a minimal agreement that meant to let participants to have more “stringent standards”, which shows the WTO agreement is acts as a brief guideline rather than a detailed agreement. All in all, the insignificance of WTO reveals a need for amendment on the agreements, yet this does not hinder its importance being the leader and guideline for the development of world trading.
Although the antidumping and safeguard action would hinder the degree of openness of a country, it is important for a country to reserve the right to protect its own interest, especially when its market is widely opened for foreign businessmen. It is the responsibility of every country to protect the interest of their citizen and the uniqueness of their place. After launching the FTA, the surge of foreign investments will lead to a more vigorous competition. Once the country allows foreign goods unlimitedly import into their homeland, the local industries will be harmed even come to extinction. It is nothing exaggerated. In fact, every part of the globe is suffering from the situation, stores are replaced by chained convenient shops; café is disappearing and Starbucks exist ubiquitously in every city. Not only did the business owners suffered, but also the irreplaceable uniqueness of every place, is now vanishing bit
The FTA is the basis for new international trading rules, and the most important thing a country can do with the assistance of the FTA is to ensure that all goods and products of a company are covered in tariff terms, such as on account of their fair value. If a small company is allowed to import food into a market in foreign countries, this can help it improve its quality and reduce its reliance on imported grains. Similarly, the same rules will apply to the rest of the world.
The FTA includes the “free movement of capital”, the transfer of jobs and jobs are protected by an “exported monopoly”, the importation of goods are not protected and the country is not entitled to take into account the economic influence of a foreign country. It will also require that all exports and imports of non-refundable debt, such as foreign debt due for the construction and maintenance of national infrastructure and the importation of national currency, must be covered in tariffs, and the value of any debt, which depends on the value of foreign cash and government-issued currency, would be zero.
Finally, in the absence of the FTA, certain industries will be free to build and operate in any country.
There is no guarantee that a country will follow through economically, and the European Central Bank cannot prevent it from doing so. If the price of an imported product exceeds the market price, such that production of that product ends, the economy shrinks to capacity and employment opportunities will suffer.
The economy cannot be kept functioning with no exceptions except for national security and economic interests. All trade partners agree that the international cooperation and integration of the goods and services sector should be as strong as possible, and that all countries should not make any exceptions for trade with each other on the basis of national security.
The FTA is not the only reason which EU states have to pay for the protection that has been put in place by Article 11 and the existing rules. The economic impact of the FTA should be evaluated by the International Trade Commission (ITC).
The ILTC’s report from May 2010 is available here.
The EU also took a positive step against the move by member state to implement some rules. The first is a draft Directive on the International Trading Union.
The commission also pointed out that EU states had to pay VAT on exports to other member states. The EC said the country has to collect VAT from its EU consumers by June next year and this was the first time it could have done so in the EU.
Commissioner Verma told the TTIP trade summit in June in Brussels that he has had “long questions,” but that he was “not prepared [to leave] such a thing open to trade outside the single market and outside the customs union”. Verma is in fact already set to come to Brussels for a summit meeting with the European Parliament on the topic.
While the commission has said that many of the rules under article 9a of the European Economic Area (EEA) are applicable in most new economies, the Commission also rejected the idea of bringing such rules to the negotiating table.
This came after a series of amendments being made by the commission to the existing Treaty on the Functioning of the European Union which has been criticised by European leaders for being under way too long.
This is in particular in light of the fact that the UK Government has pledged an additional £10 billion in additional EU financial support, and the Government is also planning to raise it in the autumn of each year.
While the Commission has already issued an update on the EU’s legal status on the free movement of trade (LTM) rules, the fact that many countries would like to see this have been ignored