Seoul recognises 1st damages after EU trade pact

South Korea has for the first time recognised damages arising from its free trade agreement with the European Union which took effect last year, officials said Thursday. The state-run Korea Trade Commission said it accepted a claim from a local pork processing company that its business was hit by surging imports of cheaper European pork. The company based in the southern province of North Jeolla saw its sales plunge by 30 percent year-on-year in the first six months of this year, a deputy director at the commission told AFP. The commission said local pork accounted for 85 percent of the domestic market against Europe's 5.6 percent in 2010, but this shrank to 71 percent last year against Europe's 12.2 percent market share. The pork company will now be entitled to low-interest loans and financial support for counselling on corporate restructuring. Local companies which see imported goods significantly eroding their own sales can apply for government support. The commission is also reviewing three other cases, including a claim from a drinks company that its sales of traditional Korean wine dipped significantly amid growing imports of European wine. The free trade pact, the first such deal linking Asia and the world's largest economic bloc, came into effect on July 1 last year. The Korea Institute for International Economic Policy has said it is expected to boost trade as much as 20 percent in the long term.