One year on: KORUS FTA looking good on the ROK side of the ledger sheet

This week will mark one year since the KORUS FTA signing. Far too soon for either side to go popping corks, but those popping off about the devastating damage it would do to the South Korean economy might want to look at the early trade numbers. It would seem Korea is doing fine.

From Yonhap:

According to government data, South Korea’s exports to the U.S. reached US$53.8 billion between March 2012 and January 2013, up 2.67 percent from a year earlier, while imports dropped 7.35 percent on-year to reach $39.1 billion over the cited period. South Korea enjoyed a trade surplus of $14.7 billion during the cited period, up 44 percent from a year earlier, the data showed.

I am no economist, but 44% is a decent gain, right?

Another Yonhap report said that U.S. imports from all countries rose 3 percent in January, while imports from Korea soared 18 percent. And, according to a Korean commerce official:

“Lowered tariffs allowed local firms to sell their products overseas at lower prices, raising the competitiveness of those companies.”

Go figure. Lower tariffs + good products + world’s richest market = competitive gains. Freaky.

This is not to say that sectors of the SK economy are not taking a hit. I haven’t seen the complete numbers, but American oranges are doing well –up 30% over last year on $150 million in sales– along with cherries jumping 80% to $80 million.

As for U.S. car imports, they have doubled this past year –though there is some debate as to what exactly the words “country of origin” mean. That will likely get more traction considering that the American-produced Toyota Camry was voted Korea’s Car of the Year by Korean journalists last month.

That aside, the South Korean auto industry looks to be benefiting quite well from the pact. (Though it should be noted, Americans have more money to spend than previous years.)

Vehicle exports to the U.S. gained 21 percent on-year to $10.22 billion over the cited period, while vehicle imports almost doubled to $720 million…Auto parts, among others, benefited most from the trade pact with exports to the U.S. rising 12.6 percent to $5.23 billion, according to the data.

On a side note, things are not going so well –or maybe they are– with the Korean-EU FTA, says Hankyoreh. They claim that the numbers out of Brussels and those out of Seoul are painting different pictures of who is getting the most out of their trade pact.

  • wangkon936

    Well balanced post Bobby.

  • SalarymaninSeoul

    Wait, you mean Korea has to send more stuff to get less? Tell me exactly how this is a good thing.

  • ZenKimchi

    On the ground, I’ve noticed the American oranges pick up. The first shipment was not so tasty, but after Christmas, the oranges were quite sweet. The ajummae at E-Mart were loading their carts. The ZenKimchi household has enjoyed them, too. Now, one of the first American products to be affected was wine, but I hadn’t noticed much of a jump in American wine imports nor a drop in prices.

  • Avaast

    Where can one buy the aforementioned cherries without taking out a second mortgage on the house? I’ve only seen them for sale in the Hyundai department store, and they are usually priced around W15,000-18,000. I actually bought some for my friend’s parents, who had never seen a cherry (or blueberries) before. So now I’ve got them addicted to outrageous fruit, but can’t seem to suggest anywhere in Gangseo where they may purchase it easily/affordably.

  • wangkon936

    Side note. A better measure of balance of trade is not balance of trade. It is the current account, which is balance of trade as well as monetary transfers. If a country exports a lot and has a trade surplus but borrows a lot of foreign money to buy capital equipment, then it’s economy is actually very weak and vice versa.

  • wangkon936

    KORUS FTA first year anniversary live feed!