The free trade agreement (FTA) with the European Union has caused prices of imports from the world's largest economic bloc to fall more than 6 percent, a local economic think tank report showed Tuesday.

   The bilateral free trade deal went into effect on July 1. Under the deal, the two sides will remove or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after its implementation.

   The Institute for International Trade (IIT) said the open trade pact that lowered import duties across the board helped push down prices of consumer goods, which is beneficial to consumers and the local economy.

   Imported products that cost less to consumers can also stem South Korea's inflationary pressure that is jeopardizing future economic growth.

   Wholesale and retail prices for imports fell an average 6.3 percent and 6.4 percent, respectively, in the past month, it said.

   Prices for such products such as alcoholic beverages fell 8.1 percent, followed by a 7.8 percent drop for food products, 5.0 percent for cosmetics and 4.2 percent for cars, the report carried out on 166 local importers said.

   The IIT under the Korea International Trade Association added that about 90 percent of South Korean importers took advantage of the FTA.

   "Of those checked, close to 40 percent said they are moving to import more from Europe, with 50 percent saying they are thinking of buying more products depending on market developments," the think tank said.

Source: Yonhap News (August 9, 2011)