Export Opportunities for U.S. Businesses
KEY TRADE INDICATORS
in Ease of Doing
ECONOMIC AND BUSINESS ENVIRONMENT
It has been over three years since the Korea-U.S. Free Trade Agreement (KORUS) went into force on March 15, 2012, becoming our nation’s largest FTA since NAFTA. The Agreement is expected to increase U.S. exports to Korea by approximately USD 10-12 billion. Trade accounts for a whopping 90 percent of Korean GDP. As the country continues to move toward more technology-intensive industries, U.S. companies will find market opportunities in leading industries such as life sciences (medical devices, pharmaceuticals, and biotechnology), industrial chemicals, IT, nanotechnology, aerospace/defense, energy, environmental technology, and transportation, to name a few. Given Korea’s strong shipping and air cargo infrastructure, this is not only a market end-point for U.S. goods and services, but also a hub for expansion into other markets
TOP INDUSTRY EXPORT OPPORTUNITIES
Korea is the 10th largest cosmetics market in the world. In 2014, the size of Korean cosmetic market was estimated to be USD 7.8 billion, 11.5 % of increase from the previous year. This market is expected to grow at an average annual rate of approximately 7-8% over the next three years. Best prospects include; products such as a combination of aging-care, skin whitening, and/or sunscreen, natural/organic skincare products, hair care cosmetics with special functions (e.g., to protect against hair loss), men’s cosmetics from simple skincare to facial scrubs, facial masks, SPF products and other functional products.
Medical Equipment and Devices
Korea depends on high-end medical devices from the U.S., EU, and Japan to supply about 60 percent of total market demand. In 2014, total imports of medical devices were USD 3.0 billion, with U.S. imports totaling over USD 1.3 billion. Best prospects include; stent, soft contact lens, sight corrective ophthalmic lens, dialyzers for hemodialysis, knee joint prosthesis, MRI device and clinical testings.
Digital IT devices are being developed to recognize, imitate, interpret and act as if they are human beings. With the expansion of “smart” IT devices, the market demand for analog semiconductors is rapidly growing. Korea is one of the major global producers of smart IT devices, high-end TVs (Digital TV, Smart TV and other high-end flat screen (TV), and automobiles. These industries drive the demand for Korean system and analog semiconductors.
TRADE REGULATIONS & CUSTOMS INFORMATION
With the FTA, 95% of tariffs on U.S. imports will be eliminated by March 15, 2017. Korea also maintains a tariff quota system designed to stabilize domestic commodity markets. Customs duties can be adjusted every six months, within the limit of the basic rate, plus or minus 40 percent.
Duties are assessed on a Cost-Insurance-Freight (CIF) basis. The main mode of Customs evaluation is the transaction value method. Value Added Tax rate of 10 percent is applied on imports based on customs value plus duties. A special excise tax of 10-20 percent is also levied on the import of certain luxury items and durable consumer goods.
Import Requirements and Documentation
For companies exporting to the Republic of Korea, the following shipping documents are required to clear Korean Customs; Commercial Invoice: An original invoice and two copies must be presented with the shipping documents and must include total value, unit value, quantity, marks, product description and shipping from/to information and Certificate of Origin. Exporters are encouraged to discuss shipping document requirements with their respective importer.
U.S. Export Controls
The Department of Commerce, Bureau of Industry and Security (BIS) develops, implements, and interprets U.S. export control policy for dual-use commodities, software, and technology. Dual-use items subject to BIS regulatory jurisdiction have predominantly commercial uses, but may also have military applications.
Download South Korea's Country Commercial Guide for more Customs and Trade Regulation Information
IMPORTANT COUNTRY GOVERNMENT ENTITIES
LOCAL U.S. SUPPORT CONTACT
Download the complete Country Commercial Guide
Source: U.S. Commercial Service