Mutual benefits of South Korea-US trade pact defended by KITA

Industry News | | MIC Customs Solutions |

The US-Korea Free Trade Agreement has delivered positive benefits for both countries, according to the Korea International Trade Association (KITA).

A leading trade organization has defended the benefits of the US-Korea Free Trade Agreement (KORUS) as the deal marks its fifth anniversary since coming into force.

At a special anniversary summit in Seoul, the Korea International Trade Association (KITA) highlighted research from its Institute for International Trade showing that KORUS has delivered economic gains for the US and South Korea alike.

The share of South Korean goods exported to the US stood at 2.57 per cent in 2011 - the year before the deal took effect - but this has since risen to 3.19 per cent as of the end of 2016. Meanwhile, the corresponding figure for US products sold to the Korean market jumped from 8.5 per cent to 10.64 per cent over the same period, representing the largest increase in ten years.

Certain sectors have seen more pronounced gains that others, with sales of American automobiles an average 37.3 per cent higher as a result of KORUS. This has increased the US market share of the South Korean car market from 9.6 per cent to 18.1 per cent.

These positive sentiments come at a time when KORUS is under scrutiny by new US president Donald Trump, who has in the past criticized the deal as damaging to American interests as part of a wider attack on free trade agreements (FTAs) signed by his predecessors.

KITA chairman and chief executive Kim In-hwa said: "It has been revealed that the KORUS FTA has greatly contributed to raising the market shares of respective exported goods in each other's countries. It has played a key role as a growth driver that brings real benefits and accomplishments."

The organization has previously expressed concerns that President Trump's protectionist instincts could be damaging to the US-Korea trade relationship, as well as highlighting the indirect risk that future disputes between the US and China could cause for the country.