European car-makers will try to block a lucrative free trade deal that Brussels has just agreed with South Korea.
The automobile industry in Europe is worried that doing away with import tariffs will flood the market with South Korean cars built with cheap Chinese components that are subsidised by the South Korean government. They say the agreement would distort the market and create unfair competition. EU Trade Commissioner Baroness Ashton and her South Korean counterpart Kim Jong-hoon put their initials on the deal on Thursday but each of the bloc’s 27 members must ratify it before it can come into force. By all but eliminating tariffs and non-tariff barriers including regulations and standards, the European Commission says the deal could benefit European exporters to the tune of 19 billion euros. That is unless the car-makers succeed in throwing a spanner in the works.