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Evaluation of the Implementation of the Free Trade Agreement between the EU and its Member States and the Republic of Korea
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Project summary:
The Directorate General for Trade (DG TRADE) of the European Commission has commissioned an evaluation of the implementation of the Free Trade Agreement (FTA) between the EU and its Member States and the Republic of Korea (hereafter referred to as “Korea”) to Civic Consulting and the Ifo Institute. This report is the final deliverable of the evaluation. In particular, the evaluation examines the effectiveness and efficiency of the EU-Korea FTA in view of achieving its objectives, the relevance of the EU-Korea FTA regarding current trade issues faced by the EU and Korea, and the coherence of the EU-Korea FTA with the EU-Korea Framework Agreement and with the objectives of the EU trade policy.
The main methodological tools used for this evaluation include a review of literature and data, covering reports, documents and academic articles, as well as data from numerous databases and sources; a stakeholder consultation consisting of an open public consultation and surveys on the impact of the EU-Korea FTA on SMEs and consumers, complemented by a civil society dialogue meeting and a stakeholder workshop, and an evaluation website that informed stakeholders throughout the evaluation process; eight sectoral and cross-cutting case studies; a total of 94 in-depth interviews, covering stakeholder organisations in various sectors at the EU level and in Member States, as well as Korea; and 15 specific analyses, most notably a descriptive analysis of trade data regarding goods and services, an econometric analysis of trade flow data, a simulation analysis with the help of a computable general equilibrium (CGE) model, analyses of FTA impacts on SMEs and consumers, a social analysis, an analysis of FTA impacts on human and labour rights, as well as an analysis of environmental impacts.
Based on the analyses conducted, this evaluation concludes that the EU-Korea FTA has been effective in liberalising and facilitating trade in goods between the EU and Korea, and also contributed to promoting trade in services and investment. Due to the FTA, exports of goods to Korea have strongly outperformed exports to other regional trade partners of the EU. Korean exports to the EU needed slightly more time to pick up but have then clearly outperformed EU imports from other regions. EU services exports to Korea also grew considerably, as did service imports from Korea. In addition to the substantial trade creation effects the agreement has generated, it has boosted bilateral foreign direct investment (FDI) and led (through trade diversion effects) to a limited, but notable reduction of global CO2 emissions, which more than compensated for any additional CO2 emissions due to increased trade between the EU and Korea. No unintended (negative) side effects of the EU-Korea FTA with respect to the economic, social, human and labour rights, and environmental dimensions were identified.
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Client/Financing Institution:
European Commission, Directorate-General for Trade
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 View
final report
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