Office of Commercial Affairs,
Royal Thai Embassy in Korea
1. Subject: S. Korea - EU FTA Officially Signed
Date: October 3, 2010
Source: Mail Business Newspaper
South Korean President Lee Myung-bak officially signed the Free Trade Agreement (FTA) between Korea and the European Union (EU) that opens the door to 27 European countries in Brussels on October 6th, local time.
The Korea-EU FTA will later on make its way to Korea`s National Assembly and European Parliament for ratification and is temporarily planned to take effect on July 1st next year. It is six months later than initially planned, at the request of Italy.
“The trade deal will not only give both countries economic benefits, but also provide an opportunity to exchange and cooperate in many fields such as education, culture, human resources, tourism and sports,” President Lee said.
“The pact means that Korea is making ties with 27 EU member countries that are forming the world's largest global market. For the EU, this agreement marks the first trade deal with an Asian country, and it can serve as a catalyst for the EU to begin trades and cooperation with other Asian countries,” the president continued.
For Korea, the latest trade deal with the EU has more than that the number of FTAs signed is increasing. Korea has signed 16 free trade deals with countries around the world as of now. However, by the time the Korea-EU FTA takes effect, that number will go up to 44.
Items receiving preferential treatment under the FTA will be expanded to cover 25% of total trade. In other words, a quarter of Korea's total trade will be under the FTA. This development is expected to add fuel to the Korea-US FTA agreements, which had been suffering from a stalemate, and speed up the ratification process by the US Congress.
More FTAs connote more tax-free products for Korean consumers, and more intense competitions for Korean firms. The most visible change will be felt in the luxury product and automobile market, as the FTA with EU slashes prices. Korean companies in this sector will face a ruthless competition. On the other hand, Korean companies concentrating on exports will receive preferential treatment over companies from Japan and other rival countries. The FTA will also expand imports from Europe in components, parts, and raw materials, which can mend Korea's chronic trade deficit with Japan.
Provisional application of the treaty and the current 5.6% duty taxes on EU-made industrial products will be scrapped within seven years. The more sensitive and controversial issue of opening up agricultural and fisheries sectors will take at least 10 more years.
2. Subject: Samsung Elec. Achieves Largest Sales Ever in Q3 2010
Date: October 6, 2010
Source: Chosun Ilbo
Samsung Electronics achieved a record 40 trillion won ($35.87 billion) in sales in the third quarter of 2010, marking greatest quarterly sales in history.
Meanwhile, its third-quarter operating profit slipped by 210 billion won compared to the previous quarter, standing at 4.8 trillion won.
Samsung Electronics announced on Thursday that it posted 40 trillion won in sales and 4.8 trillion won in operating profit in the third quarter on a consolidation basis. Sales increased by 11.5% and operating profit 13.7% year-on-year. However, compared to the second quarter, operating profit decreased by 4.2% while sales rose by 5.6%. In accumulation, the company recorded 112.53 trillion won in sales and 14.22 trillion won in operating profit as of the third quarter of this year.
The securities industry assumes that Samsung's chip , LCD, mobile phone and digital media units earned 3.3 trillion won, 0.3 trillion won, one trillion won and 0.2 trillion won, respectively, during the third quarter. The LCD and digital media units witnessed a plunge in their profits due to the impacts of the global slowdown. However, the mobile phone unit fared well, backed by the high sales of Galaxy S, its strategic smartphone. The company released its own evaluation that it performed pretty well given the tough conditions at home and abroad during the past quarter.
“Samsung did relatively well in spite of the harsh conditions generated by the struggling U.S. and European economies, thanks to help from our partners and differentiated products,” Samsung Electronics CEO Choi Ji-sung said in a special occasion held for Samsung's partners on October 1.
Samsung's performances turned out to be falling short of estimates by the securities market. Many forecast that Samsung may not join the 'Club 150-20,' referring to a group of companies whose sales and operating profit reach 150 trillion won and 20 trillion won, respectively, unless the advanced economy improves. Samsung is viewed as possible to achieve annual sales of 150 trillion won, but the general prediction is that it will be hard even for Samsung to generate operating profits of 20 trillion won.
3. Subject: S. Korea’s Q2 Growth Rate Third Highest in OECD
Date: October 7, 2010
Source: Yonhap News
South Korea's economic growth rate for the second quarter (Q2) was ranked third highest among OECD members. According to a report on the growth rates of 33 OECD members, Korea's GDP for Q2 jumped by 7.1% from the same period last year, showing the third highest leap after Turkey (10.0%) and Mexico (7.7%).
It was followed by Chile (6.3%), Luxembourg (5.3%), Slovakia (5.0%), Sweden (4.5%), Israel (4.5%), Denmark and Poland (3.8%), Germany (3.7%), and Swiss, Canada, and Finland (3.4%). Thus, Korea's record was more than double the average growth rate for OECD (3.1%).
Earlier in Q1, Korea posted a year-on-year economic growth rate of 8.1%, ranking second place after Turkey (11.1%). Combining both quarters, Korea's performance for the first half boasts a remarkable rate of recovery within OECD countries.
When compared to the previous quarter, Korea's growth rate in Q2 jumped by 1.4% - placing in 8th place after Chile (4.3%), Turkey (3.7%), Mexico (3.2%), Germany (2.2%), Sweden and Finland (1.9%), and Denmark (1.7%). Average growth rate for the OECD during the same time interval was 0.9%. This outcome can be explained in light of the base effect. Since Korea accomplished such a high rate of recovery in Q3 last year, growth rate will be comparatively low in the ensuing months.
4. Subject: G-20 Summit to Help Boost S. Korean Economy
Date: October 8, 2010
Source: DongA Ilbo
The upcoming G20 summit event in Seoul will have a positive effect on South Korea's economy, creating tens of thousands of jobs.
The Institute for International Trade (IIT) estimated that the effect of the G20 summit on the nation's economy would exceed 31 trillion won ($27.9 billion), considering the spending by foreign visitors and subsequent export expansion, said Kyung Tae Lee, president of the research center associated with Korea International Trade Association (KITA) on October 7.
According to the estimation, foreign visitors will spend 52.3 billion won, which will, in turn, generate added values of 44.6 billion won and local advertisers can save 169.8 billion won, leading to 266.7 billion won in total as the direct effect of the summit meeting.
The calculation is based on assumption that 15,000 visitors will travel to Korea during the summit meeting and they will spend $3,000 per person on average.
The summit event is also expected to help raise the nation's sovereignty rating, contributing to the reduction of overseas lending costs worth 290.4 billion won.
Increased awareness about domestic products will lead to an increase in exports worth 20.14 trillion won, creating added values of 10.57 trillion won. Jobs to be added will reach 160,000, the institute said.
5. Subject: “Won-Dollar Rate Falls to 1,110 Won - 1,120 Won”
Date: October 9, 2010
Source: Chosun Ilbo
Samsung Economic Research Institute (SERI) predicted that the won-dollar exchange rates will fall to between 1,100 won and 1,120 won by the end of this year.
A senior economist at SERI forecast on Wednesday that the recent falls in the won-dollar exchange rate will gradually slow down, appreciating the Korean won by 1 ~ 3% by the year end in a report titled `Background and Forecasts of the Intensifying Global Currency Race.'
The Korean won is estimated to be between 1,101 won and 1,123 won per dollar later this year.
“As the impacts from the global currency race persist in the upcoming year, the won's value against the dollar will increase by 3.5 - 7% next year,” the economist said.
He acknowledged that the global race to depreciate their currencies, revolving around the U.S. and China, is as intense as it is called 'Currency War.'
However, he forecast the race won't be so destructive because the U.S. fears that China might sell off U.S. treasury bonds out of pressures, leading the federal interest rate to surge, while China, on the other hand, has concerns over losing its major export market, the U.S.
Source : http://www.depthai.go.th