The European Union is considering a request by France to require South Korea to provide advanced warning of planned car exports to the EU. The requirement could be seen an initial step to the possible re-introduction of duties a year after a free-trade deal came into force. It should be noted that South Korean carmakers, led by Hyundai and Kia, posted a 24 percent jump in European sales in 2011, despite a dwindling vehicle market in the EU. This has been pressuring French carmakers which saw their local market share eaten away by their South Korean rivals. EU Trade Spokesman John Clancy said in statement that the European Commission, EU’s executive arm, has received the note from France and is reviewing the request.
Such surveillance measures may lead authorities to demand a document to accompany South Korean products bound for export to the European Union. The document would provide advance warning of the type and number of products scheduled for shipment to Europe. Such requirement may look bad for the future of the EU-South Korea free trade agreement (FTA) that was introduced on July 1, 2011, and viewed by the European Union as a model for future trade deals.
The FTA includes a safeguard clause that allows the European Commission to re-impose duties if producers in sensitive industries are hit by strong imports. However, South Korean carmakers only exported 345,000 vehicles to Europe in 2011, a far cry from the 640,000 units recorded in 2007. It should also be noted that South Korean carmakers are producing cars for sale in Europe in European factories.