Consumer Goods Sector

An Expert's View about DIY, Housewares, Appliances and Electronics in South Korea

Posted on: 11 Jun 2012

Korea is the 10th largest market for U.S. consumer goods exports.

U.S. Department of Commerce International Trade Administration The U.S.-Korea Trade Agreement: Opportunities for the U.S. Consumer Goods Sector The U.S.-Korea Trade Agreement would provide signicant commercial opportunities for U.S. exporters: • Korea is the 10th largest market for U.S. consumer goods exports; failure to pass the U.S.-Korea Trade Agreement could enable exporters from the EU and other countries to gain key advantages over U.S. exporters to Korea. • Estimated duties paid on exports of U.S. consumer goods to Korea were over $121 million from 2008 to 2010. Tari elimination could allow U.S. rms to reinvest in technology and production improvements. • More than 98 percent of U.S. consumer goods exports to Korea would receive duty-free treatment within three years of implementation of the U.S.-Korea Trade Agreement; Korean consumer goods taris currently average 7.0 percent, ranging up to 13 percent. Consumer Goods Sector Overview U.S. Consumer Goods Exports to Korea • The consumer goods sector accounted for $806 million in U.S. Averaged $806 Million exports to Korea over 2008-10 (average) or nearly 3 percent of 1 total U.S. industrial exports to Korea. $1,000 • Top U.S. consumer goods exports to Korea include paintings, golf equipment, jewelry, kitchen glassware, and motorcycles. $750 • In 2009, U.S. production of consumer goods products was over $500 $154 billion (or nearly 4 percent of total U.S. manufacturing 2 production). $250 • The consumer goods sector employed over 1.2 million workers 3 $0 in the United States in 2009. 2008 2009 2010 Improved Market Access for U.S. Consumer Goods More than 98% of U.S. Consumer Goods Exporters to Korea Exports to Korea Would be Duty-Free Within • Korean consumer goods taris average 7.0 percent, ranging Three Years 1% from zero to 13 percent. 4 19% • Approximately 80 percent of U.S. consumer goods exports to Korea would receive duty-free treatment immediately upon Immediate implementation of the trade agreement. 3 Y e ars • Taris on an additional 19 percent of consumer goods exports to Korea would be eliminated over three years, and taris on 5 Y e ars a further 1 percent of U.S. consumer goods exports would be 80% eliminated over ve years. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Korea. The denition for consumer goods in this report, unless otherwise cited, includes products within Harmonized System (HS) Chapters 46, 66, 69, 70, 71, 73, 82, 84, 85, 87, 89-92, and 94-97. 2 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 323, 327, 332, 333, 334, 335, 336, 337, and 339. Shipments used as a best available proxy for produc- tion. 3 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 327, 332, 335, 336, 337, and 339 (based on non-seasonally adjusted data). 4 Data based on three-year average for 2008-2010. April 2011 Additional information available at: www.trade.gov/KORUS in Millions USD Selected Sub-Sectors: • Appliances: Korea would eliminate taris on 89 percent of U.S. appliances exports immediately upon implementation of the trade agreement. Taris on the remaining 11 percent of exports would be eliminated over three years. • Furniture: Korea would eliminate taris on 100 percent of U.S. furniture exports immediately upon implementation of the trade agreement. • Recreational Goods: Korea would eliminate taris on 44 percent of U.S. recreational goods exports immediately upon implementation of the trade agreement. Taris on 55 percent of U.S. exports would be eliminated over three years, and taris on the remaining 1 percent would be eliminated over ve years. • Toys: Korea would eliminate taris on 100 percent of U.S. toys exports immediately upon implementation of the trade agreement. Foreign Competition in the Korean Market • Korea signed a trade agreement with the EU in 2009, which is scheduled to enter into force in July 2011. It also recently signed an FTA with Peru, which is also scheduled to enter into force this year. Korea presently has FTAs in force with ASEAN, Chile, India, Singapore, and EFTA. In addition, Korea is negotiating new agreements with Australia, Canada, Colombia, New Zealand, and Turkey; is considering launching FTA negotiations with China; and is exploring re-launching its stalled negotiations with Japan. • EU consumer goods exporters will immediately enjoy an aver- age tari of 0.3 percent upon entry into force of the EU-Korea FTA, while U.S. exporters will face an average most favored nation (MFN) tari of 7.0 percent until entry into force of the 5 U.S.-Korea Trade Agreement. • U.S. exports of price sensitive products, such as jewelry, would face a growing competitive disadvantage in the Korean market if the U.S.-Korea Trade Agreement is not enacted while foreign competitors gain duty-free access. Key States Exporting to Korea • Top U.S. states exporting consumer goods to Korea include: New York, California, Massachusetts, North Carolina, New Jersey, Pennsylvania, Ohio, Wisconsin, Texas, and Florida. Other Key U.S.-Korea Trade Agreement Commitments for the Consumer Goods Sector • Intellectual Property Rights: The U.S.-Korea Trade Agreement provides for robust protection and enforcement of intellectual property rights, includ- ing the extension of patent terms to compensate for unreasonable delays in granting an original patent. The trade agreement also has specic provisions for the protection of copyrighted works including measures designed to prevent piracy and unauthorized distribution over the Internet. Provisions to combat trademark counterfeiting include customs enforcement against goods-in-transit and streamlined customs procedures to increase eciency of enforcement. • Technical Barriers to Trade: The U.S.-Korea Trade Agreement strengthens disciplines to promote transparency in the way governments develop and apply technical regulations and related conformity assessment procedures (e.g., testing and certication). For example, Korea agreed to provide national treatment, or the same treatment applied to Koreans, to U.S. persons for participation in the development of standards, technical regulations, and conformity assessment procedures; and to accreditation, licensing or approval of U.S. conformity assessment bodies. 5 U.S. Department of Commerce calculations based on EU-Korea FTA and U.S.-Korea Trade Agreement tari commitments. April 2011 Additional information available at: www.trade.gov/KORUS U.S. Department of Commerce International Trade Administration The International Trade Administration - Your Global Business Partner The International Trade Administration (ITA) – a division of the U.S. Department of Commerce – strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of our trade laws and agreements. ITA also utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. For more information on exporting to Korea, please contact: • The ITA office of the U.S. Embassy in Korea at office.seoul@trade.gov or 82-2-397-4535, or by visiting our website www.export.gov/southkorea. • The ITA trade specialist in the U.S. nearest you by visiting www.export.gov/eac. For more information on the U.S.- Korea Trade Agreement, please visit www.export.gov/fta/korea and www.trade.gov/fta/korea. For more information on industry-specific issues, please visit www.trade.gov/mas/index.asp.
Posted: 11 June 2012

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Expert Views    
Consumer Goods Sector   By U.S. Commercial Service South Korea