David Martin, MEP

Scotch Whisky to benefit from EU-South Korea trade agreement

The European Parliament has this week endorsed the free trade agreement (FTA) between the European Union and South Korea in a deal that is expected to more than double bilateral trade in the next 20 years.  Import duties will be eliminated on 98 % of all products and other non- tariff barriers will be removed over the next five years.

David Martin, Scotland’s senior Member of the European Parliament (MEP), said: ‘I have been working extremely hard behind the scenes and directly in the European Parliament’s International Trade Committee to ensure that Scotch Whisky will benefit from this deal’.

Mr Martin, who is also Labour’s spokesperson on International Trade in the European Parliament, explained: ‘There are important provisions within this FTA to improve intellectual property rights such as geographical indications, so that Scotch Whisky will be protected’.

‘There are two important benefits for the Scotch Whisky industry in respect of the EU-South Korea free trade agreement,’ explained Scotland’s senior European MP:

- the 20% import duty on Scotch Whisky will be eliminated over a three year period creating a more level playing field in South Korea.

- South Korea has agreed to recognise and protect EU geographical indications of origin, including 'Scotch Whisky'.

‘Taken together, these two developments will help to promote and protect Scotch Whisky in what is already the industry's sixth largest export market’ continued Mr Martin.  ‘ At present, the local spirit, soju, has a 97% share of the spirits market in South Korea. Scotch Whisky accounts for less than 1% of the market and there is clearly room for growth with the benefit of fairer access. The South Korean market, for example, offers potential for both premium Blended and Single Malt Scotch Whiskies.

‘This is a great deal for Scotch Whisky and we should lift a glass and toast our future trading partnership with South Korea,’ exclaimed the Scottish MEP.

‘It is the most ambitious FTA signed by the European Union and it becomes a blueprint for future trade agreements with emergent countries, such as India.

‘It is also a good deal for the South Korean people’, explained Mr Martin who is also a member of the European Parliament’s Human Rights Committee.  ‘The agreement includes binding social, labour and environmental standards and the fundamental principles of the International Labour Organisation (ILO) such as the freedom of association and the right to collective bargaining. South Korea is now asked to ratify and implement the respective ILO conventions’.

‘The FTA will boost EU exporters of industrial and agricultural goods to South Korea. However, there are concerns that it may harm other EU sectors such as car makers. To prevent any negative impact, a safeguard clause was attached to the FTA.

‘The safeguard mechanism has been made a lot more efficient over the negotiations between the European Parliament and the Council and there are now clear indicators and deadlines. Sensitive products will be placed under particular supervision, and the European Parliament will definitely follow the implementation of these safeguards,’ concluded Mr Martin.

The European Commission calculates that EU exporters will save € 1.6 billion annually from not paying import duties. Machinery exporters will save €450 million, agricultural exporters €380 million and chemical exporters €150 million.