China's Average Tariff on Commodities from R. O. Korea is 9.7%

On August 3, 2010, the Institute for International Trade (hereinafter referred to as the Institute) under the Korea International Trade Association (KITA) issued a report on Characteristics of R. O. Korea-China Trade Structure and Considerable Factors in FTA Negotiations, indicating that China levies a tariff of 9.69% on Korean products, way higher than that on products from the U.S. (3.5%) and the European Union (EU) (5.6%).

According to the Institute, in the trade between R. O. Korea and China, the proportion of commodities in ordinary trade subject to tariffs presents a growing tendency. If the two countries sign on FTA, the tariffs will be reduced.

China is not only the largest export market of R. O. Korea, but also the starting pointing for strengthening the economic cooperation of Northeast Asia. Therefore, the negotiations shall not be limited to commodity transaction, but to introduce a "Grand Design on FTA" covering services, finance, and government procurement, etc.

If R. O. Korea and China sign on FTA, the export of consumer goods from R. O. Korea to China will increase greatly, and it may also increase the possibility of R. O. Korea marching towards government procurement market.

It is also indicated by the Institute that, with respect to the exportation to China, the proportion of consumer goods only accounted for 10%, far below that (35%) to the U.S. Since the tariff rates on consumer goods are higher than that on other products, the signing of FTA between the two countries, if so, will be conducive to improve the competitiveness of enterprises of R. O. Korea.