SEOUL, KOREA - As the China-Korea free trade agreement came to a conclusion, many in the farming and fishery sectors in Korea are concerned about the negative impact it may bring about. But there are benefits for some food producers. The most obvious candidates include the exporters of instant coffees and confiture. Other handlers of fresh seafood, such as abalone, sea cucumbers, and flatfish, are also likely to see their exports to China rise rapidly.
The Chinese government promised this time to abolish tariffs on 1,029 items (91% in total) in the agricultural and fishery area within 20 years, giving huge opportunities for Korean food exporters. Tariff duties on jams and fruit jellies will disappear immediately after the FTA deal goes into effect. Frozen orange juice and unroasted coffee will see their duties eliminated within five years. Tariffs on other food items such as Kimchi and other fermented vegetables and processed coffees will be gone in 20 years. Duties on apples, pears, grapes, and vegetables will expire in 10 years.
Kim Duk-ho, Ministry of Agriculture, Food and Rural Affairs director in charge of international cooperation, said, "Although there are many items with a long waiting period [20 years], the tariff-reduction effect of the FTA will get bigger and bigger as the time goes by."
The Korean government has relaxed a regulation on country of origin so that processed food exporters could get more benefits from the tariff abolition provision. Kang Hye-young, the agriculture ministry's manager responsible for farm goods export support, said, "Even now the exports of processed coffee to China reach $52 million a year. Other processed food items such as beverages ($37 million a year), noodles ($45 million), and rice wine ($1.5 million) will also benefit."
As for seafood, tariffs will be phased out for all items within 20 years. Of these, items such as laver (gim or nori), seaweed (miyeok or wakame), flatfish, abalone, and sea cucumbers will see immediate abolition of tariffs after the Korea-China FTA deal goes into effect. Yoon Sang-ran, Ministry of Oceans and Fisheries' manager in charge of trade and international cooperation, said, "In response to the fast-rising demand for seafood items in China, it is likely the exports of high-priced items such as abalone and sea cucumbers will increase." But the question is whether non-tariff barriers such as strict quarantine and sanitary standards will act as an obstacle to seafood exports to China.
Article provided by The Korea Economic Daily
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