KORUS FTA drops prices of imported goods
Jul 12, 2012
The Fair Trade Commission (FTC) recently announced the analysis results of the prices of major imported products from the U.S. to Korea. According to the results, the prices have been dropped since the Korea-US FTA was implemented on March 15 this year.
As of June 14, prices dropped for nine of the 13 items monitored by the FTC compared to the prices before the implementation of the KORUS FTA. Prices of imported fruit from the U.S. including cherries and oranges especially showed a remarkable decrease; one pack of ten oranges dropped from 11,046 won to 9,102 won.
The 24% tariff on oranges imported from the U.S. has been completely removed. Consumers also showed high satisfaction with the prices of American cherries; the price of 100g of cherries dropped from 3,080 won to 1,596 won thanks to the KORUS FTA.
Grape juice and orange juice imported from the U.S. have slowly shown markdowns. Although the discount rate of the tariff was around 40-50%, it is taking some time to apply the discounted tariff on their prices due to the manufacturing process as well as customs.
Competing against wines imported from the EU with a discounted tariff, the prices of American wines also have dropped in the last few months with an average discount rate of 11.5%. As the 8% tariff on automobiles has dropped to 4%, imported cars from the U.S. to Korea have also shown a decreased price; the price of one model from the Ford Motor Company dropped from 58 million won to 53.95 million won.
The implementation of the KORUS FTA has also affected the prices of products imported from the EU. According to the FTC, six out of nine monitored products imported from EU countries including electric irons, frying pans, and strollers have been offered at discounted prices since the KORUS FTA became effective.
The FTC expects that more items will show tangible effects in their prices as the current inventories of imported products are exhausted.
By Jessica Seoyoung Choi
Korea.net Staff Writer
Department Global Communication and Contents Division