Korea signs FTA with Gulf Cooperation Council

[Photo by Yonhap]

South Korea clinched a free trade agreement (FTA) with the Gulf Cooperation Council (GCC), a group of six Middle Eastern countries including Saudi Arabia and the United Arab Emirates, on Thursday, making the country a more competitive exporter of automobiles and defense products.

Under the agreement, Korea will eliminate tariffs on 89.9 percent of all items and the GCC will remove tariffs on 76.4 percent of all products.

The GCC countries are Saudi Arabia, the UAE, Bahrain, Oman, Qatar, and Kuwait.

The GCC member states will additionally lift tariffs on 4.1 percent of goods traded.

They will gradually eliminate the 5 percent tariff on major Korean export items over 20 years, including internal combustion engine vehicles, auto parts, machinery, and arms.

Tariff barriers on various arms, such as rocket launchers, missiles, ammunition, artillery, tanks, and armored vehicles, will be entirely removed.

The GCC will phase out tariffs on numerous Korean potential export items, including beef, ginseng, and seasoned seaweed. Cosmetics, both skincare and makeup, medicines, and medical devices are also slated for tariff relief.

Korea will also phase out tariffs on several petroleum products other than crude oil, such as liquefied natural gas (LNG) and liquefied petroleum gas (LPG), heavy fuel oil, bunker fuel oil, and aluminum products, all of which are key exports to the GCC.

The two sides, in the meantime, adopted six annexes on bolstering bilateral cooperation in six sectors, including energy, smart farming, advanced tech, and bio health.

As of 2022, the six GCC countries’ combined gross domestic product (GDP) ranked ninth globally. Korea’s trade amount with GCC reached $102.6 billion last year. GCC is Korea’s fifth-largest trading partner after China, the Association of Southeast Asian Nations, the United States, and the European Union.