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      South Korea’s Electronics and IT Products Industries Face Possible Setbacks Regarding Exporting Their Products to Emerging Markets Due to COVID-19

      Apr 23, 2020

      As processes of receiving foreign certifications have been paralyzed due to COVID-19, there have been setbacks to exports from South Korea’s mobile device and home appliances industries. There are growing concerns about not receiving new certifications or renewing old certifications as 17 emerging countries from Asia, the Middle East, and South America have stopped their work regarding certifications due to COVID-19. As a result, the industries need the South Korean Government’s to pursue international cooperation regarding obtaining grace periods for certifications.
      According to Korea Electronics Association (KEA), government agencies that are in charge of issuing certifications in 17 countries from Asia, the Middle East, South America, Africa, and Europe have stopped their work temporarily. As a result, South Korean companies will not be able to receive new certifications or renew old certifications from these countries for a while. Some of these countries include emerging countries such as India, Malaysia, Singapore, Russia, Mexico, Saudi Arabia, Philippines, and South Africa that have many electronics and IT exchanges with South Korea. In order to export products to these countries, South Korean companies had to receive wireless telecommunication device certification, electric and electronic products safety certification, and energy efficiency labeling.
      While it is possible to export products to countries such as the U.S., Japan, and major European countries that signed mutual certification agreements with just domestic certifications, most of 17 countries are not included in this exemption. Even if a country signed a mutual certification agreement with South Korea, there are many countries where mutual certification agreement will not be applicable due to circumstances in corresponding countries. As a result, South Korean companies need to obtain certifications from corresponding countries if they wish to export their products to these countries.
      As such, exportation of major electronics and IT products such as smartphone, washing machine, refrigerator, air conditioner, vacuum cleaner, electric oven, and dishwasher is in danger of being suspended. Companies such as Samsung Electronics, LG Electronics, and Winia Daewoo that have their businesses spread globally are under the influence.
      Exportation will not be suspended immediately because a certification is effective for at least one year and up to two years once it is obtained or renewed. As a result, South Korean companies can continue to export their products with valid certifications. However, if companies cannot obtain new certifications or renew certifications for products with their certifications about to expire, they will not be able to export corresponding products for three to four months. They will not be able to export especially new products that have yet to be certified.
      17 countries are very important for South Korean companies as South Korean companies have been exporting huge amounts of products to these countries that have started to emerge as key markets for South Korean companies. The total amount of exportation of electronics and IT products to these 17 countries in 2019 was around $16 billion that is equivalent to 9% of the total amount of exportation of electronics and IT products to every country in the world. As it will be difficult for things to become normal any time soon, it is urgent for the South Korean Government to step in and come up with solutions.
      Relevant industries believe that the South Korean Government should work to obtain grade periods for products that will have their certifications expire soon and delay approvals for new products and go through normal procedures once everything goes back to normal. To carry out these alternatives, certifications need temporary grace periods through internal cooperation. “As the level of trust in South Korean electronics and IT products is very high, the South Korean Government needs to propose a plan that will give temporary grace periods to certifications first until everything goes back to normal.” said a representative for KEA. “It needs to come up with preemptive measures before we will not be able to export our products.”
      Staff Reporter Kim, Yongjoo | kyj@etnews.com

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