Multilateral Trade Opens... What Are the Government's Support Policies for Companies?

[Asia Economy Sejong=Reporter Dongwoo Lee] As the global trade paradigm shifts towards multilateralism, the government is strengthening support to increase corporate utilization of the Regional Comprehensive Economic Partnership (RCEP).

According to the government on the 12th, the Ministry of Trade, Industry and Energy recently held an FTA Implementation and Utilization Related Agencies Council to review the difficulties faced by the industrial sector and to examine support policies for FTA utilization as a follow-up measure to the recently ratified RCEP in Korea.

Through RCEP, markets for goods such as automobiles, steel, textiles, machinery parts, and agricultural and marine products, as well as services including cultural content, distribution, and logistics, will be further opened. Additionally, the establishment of a single origin rule and diversification of origin certification methods will enhance the convenience of using free trade agreements (FTAs). The introduction of advanced norms such as intellectual property protection and e-commerce chapters will also strengthen the protection of corporate rights.

Accordingly, the Korea International Trade Association (KITA) will expand existing projects such as the ‘Visiting FTA Service’ and ‘Non-Tariff Barrier Resolution.’ These programs provide expert consultations for individual companies facing difficulties in utilizing FTAs, supporting issues related to overseas certification in export destination countries, intellectual property rights, and customs clearance.

KOTRA will expand the ‘FTA Overseas Utilization Support Centers’ that assist domestic companies locally abroad, distribute the ‘RCEP Utilization Guidebook,’ and hold explanatory sessions. The Korea Chamber of Commerce and Industry will introduce on-site, close-support services such as simplifying the origin certification procedures for issuing RCEP certificates of origin and operating RCEP education programs through 73 regional chambers nationwide to support export companies.

In the industrial sector, the Textile Industry Federation and the Korea Nonferrous Metals Association proposed to the government issues related to the Authorized Exporter System, origin certification and post-verification, and tariff reductions by partner countries. The Korea Petroleum Association requested the swift promotion of the Korea-GCC FTA, while the Korea Electronics and Telecommunications Industry Promotion Association asked the government to resolve customs clearance difficulties arising from India’s pre-import registration system and strengthened origin management regulations. The GCC refers to six countries: Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Oman, and Bahrain.

Moon Dong-min, Director General of the Trade and Investment Office at the Ministry of Trade, Industry and Energy, is presiding over the 16th FTA Implementation and Utilization Related Agencies Council held on the afternoon of the 25th at the Korea International Trade Association in Samseong-dong, Gangnam-gu, Seoul. Photo by Ministry of Trade, Industry and Energy

Government Allocates Total Budget of 668.6 Billion KRW for Support Projects

This year, the Ministry of Trade, Industry and Energy has allocated a total budget of 668.6 billion KRW for FTA utilization support projects, an increase of 2.5% compared to last year. This budget covers the '2022 FTA Utilization Support Projects' conducted by eight government ministries and 17 related agencies.

The support projects are classified into 46 programs across four areas: ▲Promotion of FTA utilization ▲Entry into overseas FTA markets ▲Strengthening industrial competitiveness ▲Specialized projects for the Korea-China FTA. The focus is on promoting domestic companies’ use of FTAs and supporting companies affected by increased imports due to FTAs.

The Ministry supports export companies to more effectively utilize FTA preferential tariffs through consulting services and helps build infrastructure such as origin management systems. It also assists domestic companies in entering FTA partner markets by providing export vouchers, acquiring overseas certifications, and resolving non-tariff barriers.

For domestic companies potentially harmed by FTAs, the ministry provides management stabilization funds and supports automation of production facilities. It also offers on-site consulting, quarantine issue resolution, and export strategy counseling services for companies exporting to China.

The government will promptly address issues that can be immediately improved and will cooperate with relevant departments and agencies to negotiate with partner countries on matters requiring discussion. The Ministry of Trade, Industry and Energy stated, "To ensure companies face no difficulties in utilizing FTAs such as RCEP, related cooperatives, associations, agencies, and the government will work more closely together going forward."

This content was produced with the assistance of AI translation services.