The South Korean government has requested the European Union (EU) to ensure that the regional product preference requirements of the Industrial Acceleration Act (IAA) do not disadvantage Korean companies. It also called for improvements to non-tariff barriers that could burden domestic exporters, including the expansion of the Carbon Border Adjustment Mechanism (CBAM), semiconductor packaging regulations, and cosmetics safety assessments.
On October 21, the Ministry of Trade, Industry and Energy held a virtual meeting of the 14th Korea-EU Free Trade Agreement (FTA) Goods Trade Committee to discuss key trade issues and ways to alleviate export challenges faced by businesses. The Goods Trade Committee serves as a channel for discussing major issues in tariffs and non-tariff areas under the Korea-EU FTA. The meeting was attended by Kim Young-man, acting director of the ministry's trade policy bureau, and representatives from the EU's Directorate-General for Trade.
Both sides reviewed the implementation status of the FTA and discussed major regulatory issues, including the IAA, CBAM, Packaging and Packaging Waste Regulation (PPWR), and cosmetics safety assessment systems.
The most significant issue is the IAA, which the EU is advancing. The South Korean government emphasized that Korea has been a reliable partner contributing to the EU's industrial competitiveness through investments and job creation in key sectors such as automobiles and batteries. It requested that systems be established to ensure that Korean components and final assembly products receive equal treatment to EU products in public procurement and support processes.
Concerns were also raised that excessive regional product requirements in strategic industries such as automobiles, low-carbon steel, and nuclear power could undermine the competitiveness and supply chain stability of companies in both countries. The government urged for sufficient transition periods and reasonable exceptions, considering the supply chain structures of related industries.
The EU Commission announced the IAA on March 4. The proposal aims to expand regional production in strategic industries such as steel, cement, aluminum, and automobiles by introducing requirements for the use of EU products in public procurement and public support projects. However, the proposal is still in the legislative stage and must go through the European Parliament and the EU Council, with the final scope of application and exceptions for non-EU partners yet to be determined.
Regarding CBAM, South Korea requested that domestic verification bodies be recognized swiftly and without discrimination compared to EU institutions. It specifically asked for the minimization of target items during the expansion of CBAM for downstream steel and aluminum products, which is set to take effect in 2028, and for sufficient transition periods to allow companies to adapt to new regulations.
In the semiconductor sector, the government sought exceptions for packaging regulations, explaining that semiconductor packaging requires special materials to prevent static electricity and protect products. It urged for recognition of exceptions regarding recycling design, the use of recycled materials, and reuse obligations.
In the cosmetics sector, the government requested measures to alleviate export challenges for domestic companies. It called for clear qualification standards to recognize experts with relevant degrees from Korea as EU cosmetics safety assessors and for the consistent recognition of safety reports prepared by domestic specialized institutions in EU member states.
Both sides also discussed expanding mutual recognition of automotive technical regulations and advancing mutual recognition agreements (MRA). The government plans to continue discussions aimed at expanding mutual recognition of automotive-related technical regulations and reducing certification costs and time through sector-specific MRA discussions.
The EU expressed interest in South Korea's offshore wind power system, electric vehicle subsidy evaluation criteria, labeling requirements for alcoholic beverages and raw material content, and safety certifications for infant textile products. The South Korean side explained the operational intent of related systems and exchanged views on market entry challenges faced by companies from both sides.
* This article has been translated by AI.
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