Auto, electronics sectors to bask in FTA with Peru

South Korean automobile, electronics and pharmaceutical industries are expected to post strong exports following the implementation of the country's free trade agreement (FTA) with Peru, a report showed Sunday. The FTA between South Korea and Peru, signed in March this year, is scheduled to take effect on Monday. The free trade deal calls for both countries to eliminate all tariffs within 10 years. According to the report by the Korea International Trade Association (KITA), South Korean makers of cars, electronics products and medicines are likely to benefit most from the free trade deal. "Exports of such products are likely to increase considerably over the short term since the deal calls for tariffs on those goods to be eliminated immediately or within five years," the report said. Currently, import tariffs of 9 percent are imposed on cars, and electronics products are subject to import duties of up to 17 percent. Under the FTA with Peru, tariffs on South Korean automobiles with engine displacements of less than 3,000 cubic centimeters will be scrapped in five years. The report also said the FTA will likely help South Korean companies accelerate their inroads into Peru in light of the South American country's rapid economic growth. "The Peruvian economy has been growing at an annual average rate of 7.2 percent for the past five years, the highest among South American economies," a KITA official said. "South Korean exports to Peru are likely to grow steadily down the road." Peru is the second South American country with which South Korea has sealed an FTA. In April 2003, South Korea signed a free trade deal with Chile. Trade between South Korea and Peru reached US$1.98 billion in 2010 with South Korea's exports to the South American country reaching $944 million. South Korea mainly imports resources such as zinc and iron and exports such goods as cars and petrochemicals.