Some European goods get cheaper with FTAKoreans will be able to buy made-in-Europe products such as cars, whiskey and medicines at cheaper prices from next month.
The Korea-EU Free Trade Agreement will enter its fourth year on Tuesday and 662 European products will be tax free.
Plus, import taxes on 1,384 goods subject to elimination of tariffs within five years, such as small cars with engines under 1,500-cc, pork belly and mackerel, will be reduced.
However, tariffs on 57 items, including products related to rice, will stay the same.
Starting in July, a 1.6 percent tariff on cars imported from Europe with engines larger than 1,500cc will be eliminated, as will the 5 percent tariff on whiskeys. The tariff on cars with engines smaller than 1,500cc will be lowered from 4 percent to 2.6 percent and the tax on frozen pork bellies will go down from 18.1 percent to 15.9 percent.
The 28 member countries of the EU will also eradicate tariffs on 282 Korean exports, including medium and large automobiles, tires and ceramic products for kitchens from July 1.
Also, 269 Korean small cars, TVs, car stereos and freight cars that were classified as sensitive products by the EU will have lowered tariffs.
Consumers can check the details of the tariff rate changes at the Korea Customs’ FTA portal site YES FTA.
Meanwhile, the Ministry of Trade, Industry and Energy said yesterday that Korea’s trade deficit with Europe widened during the past three years in a report analyzing the Korea-EU FTA.
According to the report, between July 2013 and May 2014, the third year of the Korea-EU FTA, Korean exports to the EU increased 7.8 percent from a year earlier to $47.3 billion, while European imports to Korea surged 12.5 percent to $54.7 billion.
Korea’s trade balance posted a deficit for two consecutive years after it recorded a surplus of $1.8 billion in the first year of the FTA.
The ministry said that import demand from the EU decreased due to sluggish consumer sentiment during its financial crisis and economic downturn. The strong Korean won, which made Korean products more expensive, also contributed to the trade deficit.
Total trade volume with the EU increased 10.3 percent to $101.4 billion during the third year compared to the second.
Imports of agricultural products from the EU also increased 18.8 percent in the third year from a year earlier to $3.5 billion. Compared to before the FTA, imports of agricultural goods increased 32.1 percent.
On the other hand, Korea’s agricultural exports to the EU increased only 2.5 percent during the third year from the previous year to reach $400 million.
BY KIM JUNG-YOON [firstname.lastname@example.org]