The free trade agreement (FTA) with the European Union (EU) that was ratified by South Korea's parliament can boost exports of products made by local small and medium-sized enterprises (SMEs), a state-run trade promotion agency said Thursday.
The Korea Trade-Investment Promotion Agency (KOTRA) said it has selected 10 products that local companies enjoy global competitiveness in and that could make headway in the European market, thanks to a decrease in duties.
It said SMEs may do well in such areas as light-emitting diode lighting, satellite antennas, closed circuit TV cameras, energy efficient bulbs, digital door locks and polyester.
The free trade agreement that was approved by the National Assembly late Wednesday is expected to eliminate 98 percent of import duties and other trade barriers in manufactured goods, agricultural products and services between the two partners over the next five years.
Advocates claim that an open trade arrangement with the world's largest economic bloc can boost trade and fuel economic growth, although detractors argued smaller-sized companies may be hit hard from cheaper imports.
KOTRA said exports of these items to Europe grew an average of
22.3 percent last year compared to the year before, which exceeds the 13.7 percent gains for all products shipped to the continent in the same period.
"Because European countries maintained import duties of 5.9 percent that will come down, the benefits to local producers should be positively felt," it said.
The agency also pointed out that there is steady demand for various energy-efficient products and satellite broadcasting in Europe that can help boost sales by South Korean SMEs.
In addition, it said the decision to lower duties on polyester could be a boom since local companies no longer needed to pay tariffs reaching 4 percent.
The trade promotion body said local businesses needed to upgrade their after-sales service infrastructure in Europe in order to facilitate sales.