South Korea To Expand Preferential Tariffs

South Korea’s Ministry of Strategy and Finance has announced a further expansion of its tariff exemption programme for products from least-developed countries (LDCs), with effect from January 1 next year.

South Korea, in supporting LDCs, has gradually augmented the number of items eligible for preferential tariffs every year since 2007. Applicable tariffs or quotas are not applied to specific LDC exports to South Korea, and this latest move will increase the total of items from an equivalent of 90% to 95% of all products that are normally subject to duties when imported from abroad.

More than 250 items will be added to the non-tariff list – largely agricultural, livestock and fishery products, such as fruit juice, coconuts and cherries, but also 12 manufactured products, including shirts, trousers, jackets and infant clothing. However, although the list will now total some 4,800 products, some imports, for example crude oil and petroleum products as well as agricultural and livestock products, such as rice, beef, pork and garlic, are not included in consideration of a possible negative effect on domestic industries.

South Korea will also impose a looser requirement regarding country of origin, according to which at least 40%, rather than 50%, of the value of a final product will need to be made in the country of export.

As a result of the preferential tariffs on imports from the poorest countries, those imports rose from 0.6% of South Korea’s total imports in 2007 to 0.8% in the first half of 2011. They are now expected to increase to 1.0%.

Source: Tax News