National Assembly approves EU free trade bill

South Korea's parliament approved a free trade bill with the European Union on Wednesday, clearing the last obstacle for the pact to take effect in July that is expected to boost the value of trade in goods between them to about 100 billion euros.

A text of the deal had to be pulled from parliament's consideration in early April after it was found to be riddled with translation errors, causing embarrassment for President Lee Myung-bak's administration.

South Korea's government scheduled a special parliamentary session on Wednesday to push through the bill which will lift most tariffs and trade barriers between South Korea and the European Union within the next five years.

"We expect the deal to create 250,000 jobs, which is the greatest form of welfare for working people, and contribute hugely to their lives by stabilising prices and improving income potentials," said ruling Grand National Party spokeswoman Bae Eun-hee.

The main opposition Democratic Party boycotted the session.

Delays to the European pact also delayed the processing of a separate free trade deal with the United States, which faces potentially greater resistance from the country's small but powerful farm lobby.

The United States and South Korea say they want their long-delayed FTA to be concluded by the end of the year.

The European Parliament approved the deal in February, clearing the way for the EU's largest bilateral free trade deal to take effect from July as pledged by the two sides.

The pact aims to scrap 98 percent of import duties -- 1.6 billion euros of South Korean duties and 11 billion euros of EU duties -- as well as trade barriers in manufactured goods, farm products and services by 2016.

The European Union and South Korea signed the pact, which is Europe's first with an Asian
country, in October, saying it could double trade between them.

South Korean President Lee Myung-bak has said the deal would allow Asia's fourth-largest economy to grow at more than 5 percent a year, create thousands of jobs and set a model for international trade relations.

The European Union and the United States have been in a race to be the first to seal a free trade agreement with South Korea, the world's 15th largest economy, hoping to get a jumpstart on the benefits of increased business deals.

Both Seoul and Washington are facing resistance to their deal which was signed in 2007 but had been held up by U.S. auto and beef industry concerns.

South Korean farmers say the government has done little to provide relief for the expected damage from the U.S. trade pact.

U.S. Secretary of State Hillary Clinton said during a visit to Seoul last month that Washington was committed to getting the deal done this year.

Washington says the pact will increase exports of U.S. goods by $11 billion and create tens of thousands of jobs.

REUTERS