Consumers yet to get full FTA benefit

Six out of nine popular products imported from the Europe Union and nine of thirteen imported from the United States are available at cheaper prices thanks to Korea’s free trade pacts with the two giant markets, according to the state fair trade regulator.

The Fair Trade Commission (FTC) underscored Thursday that some of the items still have room for additional price cuts, saying that the FTC is monitoring their prices and circulation networks to detect elements inflating their prices. The regulator pledged that it would crack down on those who violate the country’s fair trade law to maximize profits.

The FTC published a price list of 22 popular items imported from the two regions on the occasion of the first anniversary of the effectuation of the Korea-EU FTA and the 100th day of the Korea-U.S. FTA. Korea’s free trade pact with the EU became effective on July 1 last year, as did another with the U.S. on March 15.

The nine monitored items from Europe are electric irons, electric shavers, electric toothbrushes, wine, whiskey, shampoo, baby stroller, frying pan, and car. The thirteen items from the U.S are refrigerators, oranges, cherries, orange juice, grape juice, wine, beer, walnuts, almonds, sweet corn, shampoo, toothpaste, and cars.

The FTC said it has monitored prices of the imported products from Europe and the U.S. since March to evaluate the effect of the two FTAs on the domestic market.

As of June 14, the FTC said, six out of nine items imported from Europe are being sold cheaper than before the FTAs.

European home appliance brand Tefal has lowered the price of its electronic irons by up to 26.5 percent on some models, although the FTA lowered tariffs on the item by only 8 percent. Solatio Moscato D’asti has lowered its wine prices here by 23.1 percent, though it saved 15 percent of costs because of the FTA.

With an eight percent tariff reduction in place from the FTA, Philips lowered electric shaver prices by only 4.4 percent and Fissler Alux Premium’s frying pan by 6.5 percent, according to the FTC.

The FTC said it is monitoring items available at higher-than-expected prices to confirm whether or not their producers are involved in profiteering or collusion. The regulator will widen inspections to find out whether there are any money-consuming elements within their distribution and transportation networks.

It said if there are structural problems, it will try to iron them out in cooperation with other government bodies and, if deemed necessary, would enact regulations.

As of June 14, nine out of thirteen items imported from the U.S. are available at cheaper prices than before the Korea-U.S. FTA.

A U.S.-based fruit supplier Red Globe lowered the prices of cherries by 48.2 percent with the tariff on the item reduced by 24 percent by the FTA. American wine producer Robert Mondavi lowered the prices of its products by 11.5 percent, although the firm pays 15 percent less tariff than before the FTA.

The FTC said it will soon announce the results of its in-depth monitoring of products imported from the U.S.

Meanwhile last week, the government said it will improve the distribution system of imported cosmetics and tighten monitoring of unfair trade practices and deceptive advertising to lower their prices. Prices of imported beauty products remained high despite Korea’s free trade agreements with the EU and the United States.

“We will reduce the excessive retail margins incurred by exclusive imports and sales and provide consumers with accurate information about the price and quality to help them make rational choices,” Finance Minister Bahk Jae-wan said last Friday.

The FTC is scheduled to disclose in August the prices of 40 European and U.S. cosmetic brands in each of the different distribution channels and stages, and the differences with prices in other countries. <The Korea Times/Park Si-soo>

news@theasian.asia