Italy on Friday refused to sign a free trade deal the European Union wants to reach with South Korea, citing reservations on its impact on its auto industry. "My Italian colleague has expressed clearly considerations that made it difficult at this time to join the rest of the member states in agreeing on decisions," Belgium's foreign minister said.
Steven Vanackere said it was "not possible to definitely and absolutely confirm that an agreement is possible," but insisted: "We hope able to finalise (the deal) on Monday... with the explicit aim of signing by October 6 at the latest," at an EU-South Korea summit. A senior European diplomat said there remained fears among delegations that Italy could try to hold out until a summit of national leaders in Brussels next Thursday. Prime Minister Silvio Berlusconi "could use something to wave about back home right now," he said.
A compromise proposal by partners to delay the deal's implementation until April was in the offing, he added. Italy did not want to commit to any decision before the end of June, having initially asked for a 12-month moratorium, others said. Most observers said Rome is expected to give in to pressure from partners with foreign ministers taking up the talks over the weekend.
Rome feared its auto sector - with a particular concern for Fiat's range of small cars threatened by the lowering of tariffs on rival Hyundai models - would suffer badly under the package. Berlusconi is struggling on the domestic political front and Rome warned publicly on Tuesday that it could veto the deal, which requires ratification by all 27 EU member states and the European parliament.
"We have asked for changes, especially for the auto sector, but unfortunately our suggestions were not accepted," junior minister for foreign trade Adolfo Urso said earlier this week. Seoul has also to make parallel changes to Korean legislation on the sector's carbon emissions. Two-way trade last year between the EU and Seoul was worth some 79 billion dollars (62 billion euros). Meanwhile, ministers did decide to "start negotiations" with Malaysia on a similar deal, as well as to broach talks with China on protecting products with specific georgraphical branding.
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