Trade with South Korea: An Opportunity for Polish Companies
This Year Could Be Even Better Than the Last One – According to data from the Central Statistical Office (GUS), in the first quarter of 2024, the import of goods from South Korea amounted to 2 billion euros. – Doing business with this country offers a sea of opportunities for Polish companies. The trade agreement provides preferential tariff conditions, but one must remember all the formalities – says Joanna Porath, owner of the customs agency AC Porath.
The trade agreement between the European Union and South Korea abolished tariffs on over 98% of goods, including fishery and agricultural products. It also helped remove non-tariff barriers for the export of cars, pharmaceuticals, electronics, and chemicals. In the first five years of the agreement, exports from the EU to South Korea increased by more than 50%, and companies saved nearly 2.8 billion euros due to reduced tariffs.
Knowledge of Regulations
South Korea is the eighth-largest export market for EU goods. It is a developed economy with a high share of high-tech products. Businesses registered in an EU member state with a valid customs declaration – and, if necessary, an export permit – can benefit from the advantages of the agreement with South Korea.
Before starting cooperation with a South Korean company, entrepreneurs should carefully familiarize themselves with the regulations established by the trade agreement. This ensures they are fully aware of the applicable law and associated procedures.
– Customs agencies, like AC Porath, have specialized knowledge of the terms and criteria of the preferential treatment under the trade agreement. This way, clients can be confident about their applications, documents, and compliance with the relevant requirements under the agreement – says Joanna Porath, owner of AC Porath Customs Agency. – Furthermore, if an entrepreneur makes a mistake, it could be costly. Incorrect application of preferential tariffs or failure to meet the criteria outlined in the agreement means that all customs and tax duties applicable to the goods will be charged in full, including the interest due until they are paid.
Stimulating Trade in Key Sectors
From South Korea, Poland imports mainly electronics, vehicles, machines and mechanical devices, and household goods. The greatest savings from tariff reductions come from the export of machinery and equipment, reaching nearly 450 million euros. The second largest beneficiary is the chemical sector, with tariff savings amounting to nearly 175 million euros. In addition to the elimination of tariffs, the trade agreement with South Korea simplifies processes for entrepreneurs on both sides of the export and import.
– The agreement with such a dynamically developing country has a significant impact on stimulating trade in key sectors, such as telecommunications, shipping, financial services, and legal services – notes Joanna Porath, owner of AC Porath Customs Agency.
The trade agreement with South Korea also enables businesses to apply for public procurement contracts in South Korea and provides better protection for bilateral investments. To take advantage of the preferential conditions, companies must meet the necessary requirements. For a product to qualify for a lower or zero tariff, it must originate from the EU or South Korea. A product is considered to be from the EU or South Korea if it was produced exclusively from materials originating in these regions.
