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European Union (Definition of Treaties) (Republic of Korea Free Trade Agreement) Order 2012

My Lords, I would like to thank noble Lords for their contributions today. I did rather expect that I would hear from someone with experience and expertise in the motor industry like my noble friend Lord Edmiston. Let us start by recalling that the free trade agreement is an excellent deal overall for the UK—worth £500 million a year in UK GDP. As well as eliminating South Korean automobile tariffs, the free trade agreement contains the most ambitious disciplines ever negotiated by the European Union to tackle non-tariff barriers. South Korea will now accept international standards as being equivalent to Korean regulations, saving considerable time and expense retesting EU cars once exported to Korea. At the same time, Korean car producers must comply with all EU rules and standards, and the free trade agreement prohibits the introduction of any new unjustified barriers to trade. As well as the EU market access committee, a working group on automotive trade will be established to monitor and increase regulatory co-operation. Furthermore, the European Union has secured a range of provisions in response to the industry’s concerns, including a slower phasing of tariff reductions and a bilateral safeguard clause, which will protect any industry from harm due to the free trade agreement. For these reasons, we believe that the EU has secured a possible outcome and an excellent deal overall. The European Union free trade agreement is the most ambitious FTA yet, as I said. We are already an open market compared to the protectionist South Korean market, where most barriers will be eliminated as a result of this agreement. The agreement will contain extensive provisions to encourage two-way investment as well as trade, and this will be an essential element of the negotiation gains from the FTA. I expected the noble Lord, Lord Dykes, to speak on this SI, and I am delighted to see that in broad terms he welcomes what we are about. He asked what consequences the death of Kim Jong-Il may have for the security of North Korea and the wider region. We think that long-term stability and security in the Korean peninsula will be achieved only through the complete and verifiable denuclearisation of North Korea. We believe that the establishment of the six-party talks offers the best prospect of achieving this, and we welcome the recent talks between North Korea and South Korea and between the US and North Korea and hope that despite the death of Kim Jong-Il, they may lead to the resumption of talks in the near future. As far as the implementation and the legal system worries are concerned, how the EU-South Korea free trade agreement will be implemented is a good question. The UK is working very hard, along with its EU partners, to ensure that the free trade agreement is fully implemented as quickly as possible. So far, virtually all the agreement has been implemented as intended, although there are some areas where more work is most certainly needed. Ministers and the British Embassy in Seoul continue to press South Korea to resolve these outstanding issues. The UK also raises these issues through the EU Market Access Advisory Committee, which defines the priorities for the European Commission implementation task force. My noble friend Lord Dykes seems to have given me several questions to answer. I hope that he is happy with the answers I am giving. He asked which groups do not support the agreement. I have already set out the concerns of the automobile industry, which is virtually alone in supporting this deal. The agreement will generate benefits across the whole of the UK’s economy, as I have already explained. The noble Lord, Lord Young, asked about UKTI and about matters that I hope I have covered in answering the questions asked by my noble friend Lord Dykes. UKTI has a special role here. It is keenly working with us to help ensure that we get the best deal out of this agreement. Foreign Office Ministers have hosted a range of events with UK business and the Government of South Korea. UKTI is working hard to promote the deal, including through its report on the 100 opportunities for UK companies in Korea. I think that that is as much as I can do in answering the questions that have been put thus far. I repeat that South Korea is a high-growth, high-income market. It is an increasingly important international partner of the United Kingdom. We have discussed how the EU-South Korea free trade agreement is a game-changing deal for the European Union and, especially, the United Kingdom. It will boost the United Kingdom’s growth, it will create UK jobs and increase UK GDP by an estimated £500 million year. The agreement will also enhance our strategic relationship with an important global player and it will lay the ground for future trade agreements. Therefore, I commend the order to the Committee.