ASEAN tariff elimination rate of up to 94.5% … First FTA with Japan

Reduction of export thresholds for steel parts and others
ASEAN opens an additional market for Hallyu content
Japan is low … Excluding major agricultural products
The signing of the Regional Comprehensive Economic Partnership Agreement (RCEP), the world’s largest free trade agreement (FTA), is expected to lower the export threshold for Korean products such as auto parts and steel in the ASEAN market. With this agreement, Korea can also obtain the effect of signing an FTA with Japan.

According to the Ministry of Commerce, Industry and Energy on the 15th, with the conclusion of the RCEP, the rate of abolition of tariffs on goods from 79.1 to 89.4% in the ASEAN market will expand from 91.9 to 94.5%. Tariffs will be lowered on textiles, machine parts, and medical and hygiene products, as well as Korea’s key export items such as auto parts and steel. Additional markets, such as online games, animation, film production, distribution and screening, are expected to open up further to further extend the Korean Wave in the ASEAN region.

An official from the Industry Ministry said: “The main objective of this negotiation is further opening of the ASEAN market.” “The New South Policy will be accelerated by strengthening cooperation with ASEAN countries.”

Negotiations were conducted at a lower level than other countries in consideration of the fact that it signed an FTA with Japan for the first time and the sensitivity of the domestic industry to Japan. Tariff elimination rates for both countries are 83% each. However, major agricultural products such as rice, peppers, garlic and onion were excluded, including finished cars and machinery. As concerns about radioactive contamination continue in Japan, it was decided to open only a small portion of shellfish and maintain the embargo. However, some point out that there is concern about damage to the national industry due to the opening of the market for intermediate goods such as auto parts, synthetic resins, fibers and petrochemical products. The tariffs, which were 15% and 30%, respectively, on Japanese alcoholic beverages such as sake and beer, will be lifted within 15 to 20 years. Japanese tariffs on soju and makgeolli exported to Japan will also be removed in 20 years. It is also analyzed that the degree of market opening of the RCEP is less than that of other FTAs, and that the economic effect will not be significant because Korea has signed bilateral FTAs ​​with other participating countries except Japan.

With China, Australia and New Zealand, which have signed bilateral free trade agreements with a tariff elimination rate of 90% or more, the level of openness remained within the existing range. India’s absence in the negotiation process is also a factor that halved the effect.

Sejong = Joo Aejin [email protected] Go to reporter’s page>Koo Special School Reporter