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Korean cosmetic makers are hopeful that a free trade agreement due to be signed with China before the end of this year will eliminate duties on their products when exported.
Under current customs regulations, Korean cosmetics face tariffs rising to 130% when exported to China. Sales of Korean cosmetics to Chinese consumers have grown rapidly on the back of the growing popularity of Korean popular culture. Last year, a record 4.3 million Chinese tourists visited South Korea. Cosmetics have proved one of their most popular purchases.
Many Korean businesses see potential in selling at competitive prices directly to consumers in China, and so a trade deal would be welcome news for cosmetic brands looking to expand in China. “We can anticipate positive results from a South Korea-China FTA, but currently we will continue to focus on expanding our business in China by offering optimal products and services to our Chinese customers,” said a spokesperson for AmorePacific.
China is South Korea’s largest trading partner, while South Korea is the third largest export market for Chinese goods. Experts say a free trade deal would also demonstrate how closely relations have developed beyond simple economics.