Impacts of the KORUS FTA Orange Import Tariff-Cut on domestic Fruit Prices
2013
Moon, H.P., Korea Rural Economic Institute, Seoul, Republic of Korea | Lee, H.K., Korea Rural Economic Institute, Seoul, Republic of Korea | Park, H.U., Korea Rural Economic Institute, Seoul, Republic of Korea
To analyze the impact of the KORUS FTA on the domestic fruit market, this study conducted a consumer survey on the consumption substitution effects of importing oranges on domestic fruits and estimated the impact of lowering tariffs imported oranges on domestic fruit prices using a simultaneous equation based on monthly import statistics during the main orange-importing period. According to the survey results, it was found that 64% of surveyed consumers could feel the drop in orange prices and one quarter of surveyed consumers increased their purchase of oranges while decreasing their consumption of domestic fruits. Domestic fruits, The prices of domestic fruits increased sharply higher than previous years since the KORUS FTA went into effect, and the main cause this big increase in the price was due to the reduction in supply amount resulting from a bad gravest. The lowering of tariffs for oranges, on the other hand, had the erect of limiting the prices of domestic fruits such as mandarin oranges, oriental melons, strawberries, and cherry tomatoes, The tariff reduction of oranges imported from the U.S. had the effect of lowering the price of lowering the price of mandarin oranges by 10.4% and melons, strawberries, and cherry tomatoes by 3~4%.ln response to the tariff reduction for imported oranges, consumers responded to the overall reduction in welfare by increasing their purchase of imported oranges, On the other hand. The domestic fruit growers who harvest and supply their produce during the orange-importing period suffered a welfare reduction compared to previous years as they failed to sufficiently compensate the sharp drop in supply amount with a price increase.
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