|Proliferating FTAs to Broaden Consumer Choices|
Proliferating FTAs to Broaden Consumer Choices
Ahead of the Korea-China Free Trade Agreement (FTA) taking effect, the Korea Consumer Agency (www.kca.go.kr) conducted a consumer awareness survey* on the proliferation of FTAs and found that consumers believed that it had a positive impact on the overall market.
* Online survey (5-point scale) conducted in June 2015 among 1,350 people aged between 25~59 residing in metropolitan cities.
▣ Perceived that FTAs had a positive impact on the market
Survey respondents felt that the overall market was positively affected following a free trade agreement (3.3 points out of 5). Of the positive effects, "broader consumer choices" received the highest score (3.9 points) followed by "quality improvement" (3.4 points) and "price decline" (3.0 points).
▣ Pointed out that FTAs increased consumer problems
While the survey respondents believed that consumer information became more accessible following a free trade agreement (3.5 points), there were negative impacts such as "rise in consumer problems" (3.6 points) and "more difficulty in receiving compensation" (2.7 points).
▣ Top-10 consumer goods purchased following FTAs were mostly from the US
Among the six product items (cheese, small home appliances, nuts, snacks, cosmetics, and multi-vitamins) mostly purchased by consumers after free trade agreements took effect, most were imported from the US. Consumers mostly purchased Australian beef (71.1%) and European wine, beer, and cars.
<Top-10 Items Purchased by Origin>
▣ Consumers who had purchased European/US products gave high scores in cost-effectiveness and consumer satisfaction
Survey respondents who had purchased products from Europe and the US gave high scores (above 3.4 points) in all 10 product categories in terms of cost-effectiveness (including quality and function compared to price), consumer satisfaction, and repurchase intention. This implies that the above items possess competiveness in the market.
▣ Expectations and concerns co-exist as to the Korea-China FTA
As to positives expected from the Korea-China FTA, survey respondents said "broader consumer choices" (85.1%) and "lower prices" (48.5%). On the other hand, negatives related to product safety and consumer redress issues.
Based on the survey result, the KCA will propose to relevant government bodies on developing a system to continuously study and share information on impacts of FTAs from a consumer welfare standpoint.
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