Signing of EFTA-Korea Free Trade Agreement
Bern, 15.12.2005 - On 15 December 2005, Federal Councillor Joseph Deiss together with his counterparts from the other EFTA states (Iceland, Liechtenstein and Norway) and the Republic of Korea, signed a comprehensive free trade agreement in Hong Kong. The EFTA-Korea free trade agreement is expected to enter into force on 1 July 2006.
The free trade agreement with Korea covers trade in industrial products (including processed agricultural products, fish and other marine products), trade in services, intellectual property, public procurement and competition. A separate agreement contains provisions on investment. Trade in agricultural products is governed by bilateral agreements between individual EFTA states and Korea.
The agreements broadly improves market access conditions and legal security for Swiss exports (goods and services). The protection for sensitive agricultural products in line with Swiss agricultural policy is maintained. Furthermore, the agreements ensure the establishment and the protection of investments, as well as the protection of intellectual property rights. The agreements improve the competitiveness of Swiss business in the Korean market, not only because they prevent discrimination arising from Korea's existing and future preferential agreements with other partner countries. A competitive advantage also arises from the fact that the EFTA states obtain preferential access, which is not currently the case for their main competitors from the EU, the USA or Japan.
In terms of GDP, Korea is one of the world's ten largest economies and (after the EU) will be the largest free trade partner of the EFTA states. The growth potential arising from this agreement in terms of trade and investment is therefore considerable. In 2004, Swiss exports to Korea amounted to roughly CHF 1.3 billion, imports amounted to roughly CHF 600 million. The most important export products are machines, chemical and pharmaceutical products, precision instruments and watches. Swiss direct investment in Korea amounts to over CHF 1 billion. In addition to industrial companies, many Swiss service sector firms also have subsidiaries in Korea.
After Mexico, Chile and Singapore, Korea is the fourth overseas partner with which the EFTA states have concluded a comprehensive free trade agreement covering in addition to trade in goods and intellectual property also areas such as services, investment and public procurement. For export-dependent Switzerland with globally diversified export markets, which is not part of a larger entity such as the EU, the conclusion of free trade agreements, alongside the contractual relations with the EU and membership of the WTO, constitutes an important pillar of its policy of market opening and of improving the framework conditions for foreign economic relations.
Bern, 15 December 2005
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