The Hydra revisited: expectations and perceptions of the impact of the EU-Korea free trade agreement

• Published in: Asia Europe journal Vol. 16; no. 1; pp. 19 - 35
• Main Author: Cherry, Judith
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.03.2018
• Subjects: International Economics; Original Paper; Social Sciences
• ISSN: 1610-2932; 1612-1031
• DOI: 10.1007/s10308-017-0481-6

On 1 July 2011, a free trade agreement was provisionally implemented between the EU and South Korea. At the time, there were clear expectations within the EU business community in Seoul about the likely impact of the deal, including an increase in EU exports, the dismantling of tariff and existing non-tariff barriers (NTBs), the possible emergence of new NTBs, the further development of mechanisms for discussion and problem-solving mechanisms, and a shift in Koreans’ perceptions of all imported EU goods as luxury items. Interviews conducted with expatriate executives, diplomats and trade officials in Seoul in 2015 revealed the extent to which these expectations have been fulfilled and also highlighted the importance of broad economic and social trends in the strong performance of EU exports since 2011. These included the maturing of the Korean economy and the growing need for high-end industrial goods, and the Koreans’ increasing purchasing power and the concomitant desire to engage in displays of wealth. In addition to contributing to the general academic debate on the impact of free trade agreements (FTAs) and adding specific colour to the case of the EU-Korea FTA, this research will play an important role in shaping responses to the shifting economic, social and cultural trends that will impact the future outcomes of this key trade deal between the EU and Korea. It will also inform the EC’s discussions with current and future free trade agreement partners and its analysis of the various factors influencing the actual and perceived success or failure of those deals.