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S. Korean firms urged to gain early edge in European market
제목 없음 South Korean companies should conduct aggressive marketing campaigns in Europe to preemptively capitalize on a bilateral free trade pact with the European Union (EU), a report said Thursday.

   The free trade agreement (FTA) between Seoul and Brussels, scheduled to go into effect on July 1, calls for removing or phasing out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect. The two sides have also agreed to abolish tariffs on most industrial goods within five years of the deal taking effect.

   "It's important to attract attention from the market and earn a good reputation from consumers in the early stage of the implementation of the FTA," said the report released by the Korea Chamber of Commerce and Industry. "They should make their presence felt from the beginning."

   The report showed that tariffs on auto parts, air conditioners and refrigerators will be abolished right away, while tariffs on cars with engines of over 1,500 cubic centimeters as well as tariffs on tires and microwaves will be phased out within three years.

   Tariffs on smaller cars with engines under 1,500 cc along with those on color televisions and cargo vehicles are scheduled to be abolished over the following five years, according to the report.

   "If your product is subject to the three- or five-year tariff phase-out packages, it would be better to reduce prices as much as tariff cuts in advance," the report said, advising not to focus on short-term profits.

   The study also called on South Korean firms to check the rules of origin that the Korea-EU FTA requires.

   It cited that cars and televisions are required to be at least 55 percent comprised of Korea-produced parts to be branded as South Korean products.

   The report also asked the Seoul government to launch campaigns in European countries to improve South Korea's image and promote Korean products in the world's biggest economy.

   The FTA is expected to boost bilateral trade between South Korea and the EU by as much as 20 percent in the long term, according to the state-run Korea Institute for International Economic Policy. In 2010, trade between South Korea and the EU reached US$92.2 billion, rising around 17 percent from 2009.

Source: Yonhap News (June 30, 2011)

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