2023-05-22 21:02:05
[뉴스토마토 김지영 기자] The cornerstone of the Korea-US Free Trade Agreement (FTA), which marks its 11th year this year, dates back to 2003, when former President Roh Moo-hyun took office. In August of that year, the FTA promotion roadmap was prepared, and it became the starting point for riding on the global FTA wave. Since then, the Korea-US FTA, which took effect officially in March 2012, is being evaluated as an opportunity to expand economic cooperation between the two countries in earnest.
This is because, compared to other countries experiencing export stagnation in recent years, exports to the US are not unrelated to FTA performance, which is an opportunity to boost automobile exports.
According to the ‘Export/Import Status of May 1-20’ announced by the Korea Customs Service on the 22nd, the amount of exports to the US from the 1st to the 20th of this month was counted at $5.89 billion. This is a 2% decrease compared to the same period last year. Compared to the same period last year, China’s exports decreased by 23.4%, Vietnam by 15.7%, and Japan by 13.9%.
According to the ‘Export/Import Status of May 1-20’ announced by the Korea Customs Service on the 22nd, the amount of exports to the US from the 1st to the 20th of this month was counted at $5.89 billion. This is a 2% decrease compared to the same period last year. The photo shows cars waiting to be exported. (Photo = Newsis)
Trade surplus with the US doubled following signing the FTA
Looking at the export figures from January to April of this year, the decline in the United States is smaller than that of other countries.
According to the Ministry of Trade, Industry and Energy, exports to the US from January to April of this year totaled $9.185 billion, down 4.4% from the same period last year. During this period, exports to China decreased by 26.5% and to Japan by 20.1%.
The reason why exports to the U.S. did well compared to other countries is attributed to the boom in automobiles. It is an analysis that the main product has changed from popular semiconductors to American cars as the local electric vehicle market grows.
The cornerstone is the Korea-US FTA. With the Korea-US FTA as an opportunity, the market share of Korean cars in the US market has been steadily increasing. In 2012, the year of the actual FTA, exports to the US stood at $10.574 billion, but increased to $17.159 billion in 2021.
It’s not just cars. Since the Korea-US FTA entered into force in March 2012, most products are traveling between the two countries without tariffs. As of last year, South Korea removed tariffs on 98.4% of 11,261 items, and the United States removed tariffs on 99.2% of 10,505 items.
As a result, exports of semiconductors increased from $2.611 billion in 2012 to $9.051 billion in 2021, and exports of automobile parts increased from $5.961 billion to $9.051 billion during the same period.
With the signing of the FTA, Korea’s goods trade surplus with the US doubled from $11.6 billion in 2011 to $22.7 billion in 2021.
According to the ‘Export/Import Status of May 1-20’ announced by the Korea Customs Service on the 22nd, the amount of exports to the US from the 1st to the 20th of this month was counted at $5.89 billion. This is a 2% decrease compared to the same period last year. The photo shows the Korean beef corner of a large supermarket in downtown Seoul. (Photo = Newsis)
11 years since the FTA took effect… “Concerns, mostly unfounded”
The Korea-US FTA, which was laid by former President Roh Moo-hyun, had many controversies until it came into effect. This is because it was judged that the conclusion of an FTA with the US, a powerful country, might weaken the competitiveness of the domestic industry.
In particular, there was great concern that the country’s agricultural and livestock industry would be severely hit if US beef came in without tariffs. For this reason, following 10 formal negotiations, the FTA negotiations were concluded in April 2007, but did not immediately take effect.
Afterwards, even following the Lee Myung-bak administration passed, the ‘mad cow disease’ put the brakes on the FTA. Accordingly, in April 2008, Korea and the US reached an agreement on beef, and following further negotiations, including the extension of automobile tariffs, it was able to officially take effect on March 15, 2012.
However, 11 years following the effectuation, the general consensus is that concerns regarding the FTA were unfounded. In the case of the domestic livestock industry, the dominant evaluation is that it has become an opportunity to enhance competitiveness as it has become larger following the FTA.
The film industry, which had great concerns over the reduction of the screen quota system, is evaluated as a stepping stone for growth as a systematic support system was established with the FTA as an opportunity.
Sejong = Reporter Kim Ji-young wldud91422@etomato.com
This article was finally confirmed and corrected by Lee Kyu-ha, head of the Economics Department, in accordance with the News Tomato Reporting Rules and Code of Ethics.
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