According to the Australian Trade and Investment Commission, trade between South Korea and Australia grew significantly from AU$600 million in 2003 to AU$49 billion in 2018.
Despite the vast trade between both countries, there is still untapped potential for new Australian businesses and entrepreneurs to export food, beverages and consumer goods to Korea. If you’re looking for export markets to venture into this year, consider South Korea.
We break down the information in this exporting guide and explore the sectors that hold potential for new and established Australian businesses.
Trade between both countries strengthened after the Korea-Australia Free Trade Agreement (KAFTA) was enacted in December 2014. KAFTA protects and strengthens the competitive position of Australian businesses in South Korea, and eliminates tariffs on nearly all of Australia's present exports.
Under this agreement, almost 300% of tariffs have been eliminated on Australian beef, bottled wine, wheat, sugar, dairy products, seafood, and horticulture exports.
Below are the steps you’ll need to take if you want to export to Korea under KAFTA:
The first step is to identify which goods or services you want to export to Korea.
The next step is to identify the custom tariff codes for those goods. Goods are identified based on the harmonised system (HS), in which Australia uses an eight-digit tariff code and Korea uses a ten-digit code.
Once you have the tariff codes for your goods, you’ll have to identify the preferential duty rate of those goods under KAFTA. This can be found by using the Korean Customs Service Tariff Database Inquiry.
For products that you are not sure which HS codes will be applicable, you can get an advance ruling from the Korean Customs Service.
Preferential lower tariff rates are only applicable on goods that ‘originate’ in Australia. Goods manufactured in Australia with inputs from other countries might still be considered as originating from Australia if the product underwent considerable transformation in Australia.
Once you have determined that your goods qualify for preferential tariffs under KAFTA, you will need a Certificate of Origin (COO) before you export. You can obtain this certificate from the Australian Chamber of Commerce and Industry (ACCI), the Australian Industry Group (Ai Group), or International Export Certification Services (IECS).
You don’t need a Certificate of Origin to export to Korea if the total customs value of the goods is less than AU$1,000. For goods valued greater than this threshold, you’ll need a certificate of origin if you want to utilise the preferential tariffs under KAFTA. Otherwise, you’ll be subjected to the full customs duties and taxes.
As a business from Australia, should you want to trade with South Korea, you must be aware of the country’s import taxes and laws. Although most of the tariffs are eliminated under KAFTA, there are still specific tariffs and duties that might be applicable. For more information about them, please visit the Korean Customs website. Apart from the tariffs, there are specific laws involved in the process of exporting to South Korea which is as follows:
In the case of food items, labels must show the product name, type of product, date of manufacture, expiry date, preservation methods, ingredients, weight or quantity, and the importer’s name, address, and phone number.
The metric system is used for all measurements.
Food and pharmaceutical products must show the labels in Korean.
Exporters may require a pro forma invoice to open a letter of credit.
A bill of lading or an airway bill must be made out to the order of L/C Opening Bank.
Two packing lists are required where one copy is included in the package, and the other has to be sent to the negotiating bank.
A certificate of origin is required in order to utilise the preferential tariffs under KAFTA.
For additives containing ruminants or ruminant byproducts, a Certificate of Bovine Free Declaration (BSE Free) is necessary.
For pharmaceutical products, a safety and efficacy test report is required.
Some technical documents are required for certification and approval of medical devices.
In case of insurance provided by the exporter, a certificate of insurance must be provided.
Weapons, drugs, pornography, provocative or treasonous material, and counterfeits are prohibited from being exported to South Korea.
The food and beverage market holds great opportunities for exporting to South Korea. Australia produces quality food products and ingredients, which allow it to be considered a safe and reliable source in Korea. The major part of South Korea’s imports that holds potential includes beef, wheat, sugar, barley, oil seed, corn, potato, wine, and dairy products such as butter. Other products in this sector include ready-to-eat meals and desserts, juices, biscuits, condiments such as edible oils, chocolate, seafood, fruits, nuts, vegetables, and premium non-alcoholic drinks.
The top five Australian imports in South Korea are meat, mineral fuels, ores, precious metals as well as nickel and articles of thereof.
DHL Express is a reliable trade partner in which our experience and expertise will greatly help businesses who plan to export to South Korea. We have four dedicated aircraft that help facilitate logistics and shipping services for Australian exporters shipping to Korea. A 24-hour local customer service is also available weekly from Monday to Friday – in the event you need additional information of your goods or run into any export challenges, rest assured our on-site team is available to assist you. Our Transported Asset Protection Association (TAPA) certified facilities further support supply chain security and conformity to the highest standards.
For more information about how DHL Express can be beneficial to your business, open an account with us and start enjoying the benefits of MyDHL+ today.
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