Project Web -- MktAccess

The following are the most important non-tariff barriers currently imposed by the Korean government:

Korean customs authorization procedure is too slow and arbitrary, although changes have been made in recent years. For example, a procedure for an agricultural product that takes less than four days in other Asian countries could take from 2 to 4 weeks in Korea, (except of course for perishable fruits and vegetables).

In order to enter the Korean market, sea fish products were long required to associate with Korean companies. This measure was retired and replaced by duties of around 40%, but then increased to 70% (by means of an administrative clause) for cases of no association (joint venture) with Korean companies. This requirement effectively prohibits import of fish products, which is reflected in TABLE 1.

Many countries cite Korea’s nontransparent and burdensome labeling requirements as barriers to entry. These requirements are often arbitrarily enforced. In 1999, the U.S. Government worked with Korean Food and Drug Administration (KFDA) officials to gain acceptance of foreign language labels if they meet the regulatory labeling requirements of the originating country.

The Korean Ministry of Environment (MOE) approved new packaging and labeling standards on food in 1999, and will implement them in 2001. These new standards are aimed at reducing the use of polyvinyl chloride shrink-wraps to protect the environment.

The National Plant Quarantine Service and National Veterinary Research and Quarantine Service, a sub-organization of the Korean Ministry of Agriculture and Forestry (MAF), accounts for the greatest delays in import clearance. These MAF agencies are responsible for administering plant, animal, and animal product inspection. MAF imposes numerous requirements that prohibit access (e.g., expansion of U.S. quarantine zones and definitions of quarantinable pests) or delay import clearance (e.g., incubation testing for non-quarantinable pests and product detention based on administrative errors on export certificates), and these factors are an additional cost for Chilean exporters and, ultimately, for consumers.

Korea agreed as part of the Uruguay Round Agreement on Agriculture to reduce its domestic support (AMS) for agricultural products by 13% during the implementation period that expires at the end of 2004, so Chile will face better conditions (lower tariffs) for exporting these kinds of products into Korea.

U.S. firms in a number of sectors continue to report that the combination of tariffs and value-added taxes for agricultural and manufactured products is often sufficient either to keep imports out of the Korean market or to make their prices uncompetitive. Chile is damaged by these measures because Chile faces high tariffs for elaborated products. As mentioned earlier, Korea favors imports of raw materials, but not elaborated products, which have higher prices.

Several forms of financial support have been strengthened; such support includes numerous tax incentives (with expiry dates set for December 2000 or 2003) whose effectiveness is dubious. Apart from traditional sector recipients of assistance (e.g. agriculture, livestock), support has been directed at small and medium-sized enterprises, research and development, and firm relocation. Other forms of support have included preferential energy pricing for farmers and manufacturers.

Korea suppressed three export-related subsidies in 1998; it now maintains one subsidy for fruit and flowers. As of April 1999, a Simplified Fixed Drawback Rate Schedule, covering more than a third of tariff items (mostly manufactures), has been in operation for small and medium-sized enterprises.[2]

[1] Largely based on ProChile, Report of The Chilean government Agency on bilateral trade Chile and Korea, March 2000; The U.S. Trade Representative, National Trade Estimate Korean Report on Foreign Trade Barriers, 2000.

[2] World Trade Organization, The Secretariat’s Report, Trade Policy Review Korea, Trade and Trade-Related Policy Developments Section, September 2000

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