The Ministry of Trade, Industry and Energy announced that Yeo Han-goo, head of the Trade Negotiation Headquarters, officially declared the conclusion of the CEPA negotiations with Serbia's Minister of Internal and Foreign Trade, Jagoda Lazarević, in Belgrade on June 5 (local time).
The CEPA negotiations were initiated during the 2023 Korea-Serbia summit. Following the start of negotiations in September 2024, the first official talks were held in December of the same year, culminating in the completion of discussions across 12 chapters.
Serbia, emerging as a manufacturing hub in Europe, boasts an extensive network of FTAs and is gaining attention as a new partner amid rising costs in major Eastern European production centers.
The agreement is expected to foster collaboration in various sectors, including automotive, information technology, renewable energy, and nuclear power. South Korean mobility companies, including domestic auto parts manufacturers, have already been actively entering the Serbian market.
Additionally, there are expectations for expanded cooperation in advanced industry supply chains utilizing lithium and other materials. Serbia is home to the Zadar project, one of Europe's largest lithium deposits. As China weaponizes key minerals like rare earth elements, the need for supply chain diversification through collaboration with Serbia is becoming increasingly important.
The Korea-Serbia CEPA is based on a high level of market openness. Both parties agreed to eliminate tariffs on over 90.2% of items by number and over 96% by import value. Furthermore, Serbia, which is not a member of the World Trade Organization's Information Technology Agreement (ITA), has committed to abolishing tariffs of up to 25% on semiconductor and electronic products.
The agreement opens the market for eco-friendly vehicles, including electric and hybrid cars, and eliminates tariffs on all automotive parts immediately. With expectations for growth in exports of consumer goods like K-food and K-beauty to Europe, tariffs on these items will also be removed.
Moreover, tariffs on Serbian lithium, cobalt, nickel, graphite, and rare earth elements will be eliminated immediately or within five years. This is anticipated to stabilize the supply chain for key raw materials in South Korea's advanced industries, such as batteries and semiconductors.
Tariffs on feed and processed corn, which account for over 40% of Serbia's exports to Korea, will be eliminated immediately and over ten years, respectively. However, market access for sensitive agricultural products like rice, natural honey, strawberries, and other fruits, meat, and dairy products will be minimized to achieve a balance of mutual benefits.
Additionally, agreements were reached on origin rules, expedited customs and trade facilitation, intellectual property protection, technical regulations (TBT), and sanitary and phytosanitary measures (SPS), as well as economic cooperation. The government plans to swiftly proceed with follow-up procedures for formal signing, including legal reviews and translations of the agreement, and to ensure a smooth process for economic impact assessments and parliamentary ratification.
Yeo Han-goo stated, "The conclusion of the Korea-Serbia CEPA will serve as a stepping stone to elevate economic cooperation with Serbia, a key partner in the Western Balkans. In the rapidly changing trade environment marked by the spread of protectionism and the restructuring of global supply chains, this agreement is significant not only for market openness but also for building a cooperative platform in future industries such as supply chains, energy and minerals, AI, and biotechnology."
* This article has been translated by AI.
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