The Korea-Peru free trade pact has boosted the competitiveness of Korea-made products over its first year of implementation, with the nation’s automotive and TV manufacturers outpacing Chinese and Japanese rivals in the South American country.
The Korea International Trade Association said on Tuesday that the nation’s exports to Peru increased 28.9 percent in the 11 months up to June, though imports from the country decreased 7.6 percent during the same period.
The growth figure surpassed the 6.2 percent growth in the nation’s total exports over the past year, which was affected by the deepening European debt crisis and the economic slowdown domestically, KITA said.
Korea’s trade deficit with Peru also decreased from $500 million to $420 million after the free trade agreement took effect on Aug. 1 last year.
Until 2010, Japanese carmakers had dominated the Peruvian market with a 43.33 percent market share, while Korean players claimed 24.96 percent.
However, the situation began to change in 2011 when Korean and Japanese car makers posted 29.85 percent and 29.89 percent market shares, respectively.
In the first five months of this year, Korea exceeded Japan in terms of car sales in Peru. Korea became the top carmaker with 32.06 percent market share, followed by Japan with 29.16 percent.
For color televisions, Mexican and Chinese makers ruled the Peruvian market until 2010 as their combined market share reached nearly 85 percent.
But beginning in 2011, Korean electronics makers expanded their market influence. In that year, their 28.16 percent market share first exceeded China’s 24.76 percent. Currently, Korea holds 27.91 percent of the market, while China controls 20.25 percent.
KITA predicted other sectors, like paper products, batteries, textiles, plastic products and refrigerators that would benefit directly from the FTA, would expand their presence in the coming years.
“Competition with China and Japan is expected to get fiercer as the two neighboring countries have also implemented free trade pacts with Peru,” said Myung Jin-ho, a research fellow at KITA.
“In order to continue the positive effects of the Peru FTA, (the government) needs to extend support programs for businesses, especially for small and medium-sized firms.”
By Lee Ji-yoon (
jylee@heraldcorp.com)
