Seoul sorts drugs and medical devices slapped with Russia sanctions
The government has begun to assess the situation to implement its sanctions against Russia following its participation in the joint statement issued by major members of the World Trade Organization (WTO) on March 15.
The current situation has raised concerns among pharmaceutical companies and medical equipment manufacturers about damage to their industries, as Russia’s invasion of Ukraine drags on and the international community’s sanction against the Russia intensifies.
According to industry insiders on Thursday, the Ministry of Commerce, Industry and Energy selects items, including medical products and equipment, subject to import or export restrictions on the Russia after Korea joined the WTO’s joint statement on the possibility of revoking Russia’s most favored nation (MFN) last month.
The MFN principle treats the 164 WTO members equally in terms of benefits, such as the lowest tariffs, the highest import quotas and the fewest trade barriers.
In the case of import restrictions, the government is reviewing measures, such as raising the current tax rate to the WTO preferential tax rate and completely banning imports or exports. .
In response, various health and medical associations identify items heavily dependent on trade with Russia, including those that Korea has recently increased imports from Russia and those that could harm Korean industry due to restrictions. commercial.
According to a report published by Korea Bio on the effect of the Russian-Ukrainian crisis on the healthcare industry, the Russian pharmaceutical market was valued at $28.2 billion in 2020, the second largest market in Europe after Germany.
Although Russia imports 56.3% of its medicines, most imported medicines come from multinational companies, indicating that Korea’s share is insignificant.
However, Russia is the fifth largest market for Korean medical device manufacturers. The Korean Medical Device Industry Association reported that 270 Korean companies exported medical equipment worth $257.9 million to Russia in 2020.
As a result, industry insiders fear the industry will suffer if the government follows through on the WTO statement.
“There are some items that we export to Russia on a large scale,” said an official from a medical device company, asking to remain anonymous due to the sensitivity of the issue. “In particular, there are many medical devices in the field of in vitro diagnosis of infectious diseases.”
The official added that the government must first discuss export restrictions with medical device companies.