Korea's Mega FTAs and Opportunities

As the world economy is entering the age of mega-scale free trade agreements (FTAs), Korea is emerging as an optimal business location for foreign investors seeking to establish global value chains.

Mega-FTA strategy that leads to success

Korea’s mega-FTA networks provide tariff-free or low-tariff entries into the world’s largest markets, including the United States, the European Union, and China. For products manufactured in Korea and exported to China, 48-hour customs procedure is applied in accordance with the Korea-China FTA.
In order to capitalize on such benefits, a growing number of foreign-invested companies are investing in various fields in Korea. Investing in Korea will be the best strategy for success for multi-national companies extending their global reach beyond the Chinese and ASEAN markets.

Building Global Network through Korea’s Mega-FTAs

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Benefits of the Korea-China FTA

The FTA with China has placed Korea in an advantageous position on the global FTA network. Korea is growing into the largest and promising investment hub in East Asia, thanks to its favorable conditions such domestic market size, offshore reminbi (RMB) hub, and geographical location.

Changes brought by FTAs

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Business model utilizing Korea’s FTA network: Coffee

A coffee processing company in Korea imports coffee beans from Vietnam and China tariff-free under FTAs with those countries. The company then roasts, blends, and grinds the imported coffee beans in Korea to produce and package processed coffee. It again takes advantages of the tariff benefits by exporting the coffee products from Korea to other countries or regions with which Korea has entered FTAs, such as the United States, Canada, and the European Union. This business model reduces distribution period by up to 30 days, allowing the company to offer fresh and quality coffee to final consumers and coffee retailers worldwide. Food products processed in Korea after importing ingredients from other countries are regarded as Korean-made products and eligible for FTA trade benefits.

High value-added business: Coffee cold chain business model

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