Galaxy Gear will be free of tariffs after ruling

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Galaxy Gear will be free of tariffs after ruling

Samsung’s Galaxy Gear, the company’s competitor to the new Apple Watch, will be exported to most countries without tariffs thanks to an international customs authority’s recognition of it as a mobile device, not a watch.

The Ministry of Strategy and Finance announced Tuesday that the World Customs Organization (WCO) in Belgium decided to recognize the Gear as a mobile telecommunications device Monday.

Previously, international customs authorities hadn’t categorized the device in any product categories, and the Gear faced tariffs of up to 10 percent in countries that categorized it as a watch.

The decision doesn’t have legally binding power on the WCO’s 179 countries, the Finance Ministry said, but all members are likely to accept the decision.

Tariff eliminations on the Gear could begin as early as June unless complaints are raised from member countries by May.

If the decision is accepted, tariffs of $13 million will be saved, the ministry said, which could give the Gear price competitiveness against similar wearable products.

Mobile telecommunications devices have benefitted from tariff-free trade in most member countries of the World Trade Organization, thanks to its Information Technology Agreement, which encourages trade in mobile devices.

But the world’s major wearable device-making countries - including Korea, the United States and Japan - have debated the wearables issue with countries like India, Turkey and Thailand, which insist the wearables be categorized as watches.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]

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