R. Korea is the world’s thirteenth largest import country. In 2007 its total imports were US $ 356.8 billion accounting for 2.5% of the total world imports. R. Korea trades with 207 countries in the world. Lao PDR was ranked at the 83rd import source of R. Korea in 2007. Lao PDR’s major exports include wood products, minerals, metal, handicrafts, industrial products, garments, agricultural products, and coffee. Lao producers have opportunities to access R. Korea market with special tariff concessions in three ways.
Preferential Tariff Treatment for LDCs
On 1st January 2000, R. Korea implemented preferential tariff treatment for LDCs, including Lao PDR. Recently, R. Korea has offered duty-free and quota free market access for 253 products (6-digit HS Code). These products consist of 60 chapters listed in the Harmonized Tariff Nomenclature such as fish, shrimps, fruits, beans, coffees, cigarettes, wood products, clothes, metals, gold and others.
ASEAN-Korea Free Trade Agreement (AKFTA)
ASEAN-Korea Free Trade Agreement was signed in 2004 leading to the FTA negotiation between R. Korea and ASEAN, which was successfully concluded and signed in December 2005. The R. Korea is committed to reduce tariff rates on the products listed in the Normal Track. Tariff reduction and elimination modality are as follows:
- R. Korea has gradually reduced tariff rates placed on Lao PDR on 5,060 tariff lines (6-digit HS Code), the implementation of tariff rates will be started in 2010 onwards.
- 4,734 tariff lines will come under the implementation of tariff elimination on 1st January 2010.
- 326 tariff lines, mostly covering garment and electronic products, will come under a tariff rate reduction to 0-5% on 1st January 2016.
Asia-Pacific Trade Agreement (APTA)
Under the APTA, R. Korea offers Lao PDR two lists of tariff reduction. These are as follows:
·National List of Concessions consists of 1,367 products (10-digit HS Code) including live animals, fish and fish products, agricultural products, vegetables, minerals, garments, industrial products, leather (listed in chapters 3 to 95 of the Harmonized Tariff Nomenclature). The highest MoP is 50% and the lowest MoP rate is 10%.
List of special concessions to LDC members consists of 306 products (10-digit HS Code) including fish and fish products, vegetables, agricultural products, garments, industrial products and leather (chapters 3 to 95 of the Harmonized Tariff Nomenclature). The highest MoP is 100% and the lowest MoP is 20%.
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