Korea Agreement FTA - European Union External Action · EU Korea FTA Background Divergences in technical regulations(safety and other standards) have act as hidden tariff in terms

EUKoreaFTA

The EU-Korea Free Trade Agreement

Motor Vehicles and partsAddressing non-tariff barriers and promoting convergence

and recognition

Fernando PERREAU DE PINNINCKHead of Unit

Industrial Tariff and Non-Tariff Negotiations, DG Trade European Commission

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Content

Background

EU and Korean regulatory approaches

The Motor Vehicles Annex- Coverage and objectives- Obligations- Implementation – WG on Motor Vehicles- Dispute Settlement

Conclusion

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Background

Divergences in technical regulations (safety and other standards) have act as hidden tariff in terms of additional costs, and can act as a significant non tariff barrier to trade

Divergences can be justified by differences in regulatory approach, and regulators have the duty to ensure the safety of motor vehicles and to act to protect the environment

International efforts to harmonise motor vehicle regulations – UNECE, of which both Korea and the EU are members

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Divergences between EU and Korean car regulations

EU has chosen to refer to the largest extent to UNECE Regulations for its legislative objectives. Korea has a combination of standards – some similar to UNECE, others to FMVSS, others are own standards, e.g.:- application of EU/UNECE regulations for diesel

emissions or (planned) for CO2 emissions- application of US-based regulations for gasoline

emissions- specific Korean standards for bus maximum width

or seat size EU has a type approval system, Korea self-

certification except for environmental regulations

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EU-Korea FTA – Annex 2B - Coverage

Products covered- Motor vehicles and parts- Not covered:

tractors, snow and golf cars, construction machinery other than trucks

Objectives- Reciprocal market access- Compatibilty of regulations based on international standards- Promotion of cooperation

UNECE and its « Working Party 29» recognised as the relevant international standard setting bodies, both parties to cooperate within UNECE

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Main obligations

1. Recognition of equivalence of international standards

2. Certification and application of regulations

3. Convergence of future regulations

4. Avoidance of new non-tariff barriers

5. New technolgies or features

6. MFN for taxation and emission regulations

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1. Recognition of equivalence of international standards

(Art. 3)

EU to accept any Korean product complying with UNECE regulations (list of 74 items/areas)

Korea to accept EU products complying with UNECE regulations listed (34 items/areas covering 42 KMVSS)

EU and Korea to harmonise regulations to UNECE regulations: 1 item/area for the EU, 29 items/areas for Korea, within 3 years

Recognition of equivalence and harmonisation to cover the core of Korean safety standards (2/3rds) and the most significant ones

For standards not recognised/harmonised, consultation procedure in case of market access problems

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Equivalence for 34 items with UNECE and KMVSS Regulations

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Equivalence for 34 items with UNECE and KMVSS Regulations

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Equivalence for 34 items with UNECE and KMVSS Regulations

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Equivalence for 34 items with UNECE and KMVSS Regulations

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Equivalence for 34 items with UNECE and KMVSS Regulations

Tyres

Seating Systems Bumper

Impact

Lighting & Signalling Systems

Passenger Car Break

Emission

Driver’s Visibility

Head Restraints

Engine Power

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2. Certification and application of regulations (Art. 8)

When a Party accepts equivalence with, or harmonises according to, UNECE regulations, UNECE type approval certificates shall provide presumption of conformity→ without prejudice of verification of conformity in a

way that is not contrary to the presumption of conformity, i.e. by random sampling

→ the EU, as UNECE member, can issue UNECE certificates for all the UNECE regulations subject to recognition or harmonisation

Possible refusal in case of lack of conformity, or in exceptional cases for compelling safety, heal or environmental risk

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3. Convergence of future regulations (Art. 4)

UNECE to be the benchmark: Commitment not to introduce new domestic

regulations diverging from UNECE, unless strongly justified

Commitment to introduce in domestic legislation new UNECE regulations if available

National regulations diverging from UNECE to be reviewed every three years to assess reasons for divergence

In areas where there are no UNECE regulations, consultation to develop new international standards and/or approximation of national regulations

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Other provisions

Avoidance of new non-tariff barriers: no other measures to be adopted if they nullify/impair the benefits of the Annex, unnless necessary to protecty safety, health or the environement (art. 7)

New technolgies or features allowed in the other Party to be permitted, can be refused only if proved that they create a risk for health, safety or the environment (Art. 6)

MFN provisions for taxation and emission regulations

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OBD and emissions

OBD: EURO 6 OBD to be considered accepted as complying with LEV and ULEV OBD

Till the end of 2013 (EURO 6 OBD to be available in 2014), transitional arrangements under quota for sales of cars with EURO 5 OBD car makers on the basis of their previous sales of cars with EOBD

Emissions: derogations from the application of the Korean Non Methane Organic Gases fleet averages for car makers selling less than 10.000, 4.000 or 250 motor vehicles per year

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Implementation

Close cooperation and consultation to address market access and regulatory issues

Working Group on Motor Vehicles and Parts:- Supervision of implementation- Address any questions of

interpretation/application- Monitor progress towards harmonisation- To meet at least once a year and when needed

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Dispute settlement

Expedited procedures:

Urgency procedure

Period for consultations halved to 15 days

Period for interim panel report brought to 60 days from 90 days

Immediate compliance in principle, if not reasonable period of time for implementation to be between 90 and maximum 150 days in case no legislative action needed

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Conclusion

Convergence towards UNECE clear objective

Implementation is the key

Mechanisms in place to address market access problems even before they become real

Cooperation between the EU and Korea to be strengthened – fundamental for the successful application of the Annex