Lowest IPR Trade Deficit
The Bank of Korea announced on August 24 that South Korea’s trade deficit for the first quarter of this year with regard to intellectual property rights (IPR) is estimated at US$780 million. A red ink figure continued for 25 quarters in a row since records began in the first quarter of 2010, but the amount recorded in the first quarter of this year is the lowest among its first-quarter deficits. During the same period of last year, the amount had been as large as US$1.97 billion.
Such a rapid decline can be attributed to a significant decrease in patent fees for electrical and electronics products large South Korean companies have to pay to U.S. companies and smaller South Korean companies’ export of medical and pharmaceutical technology to the U.S., France, etc.
The smaller firms posted an IPR trade surplus of US$630 million, an all-time quarterly high, in the first quarter of 2016. With respect to France, the surplus reached US$339.4 million after a continuous deficit.
“South Korean companies received substantial patent fees by exporting their pharmaceutical technology to France,” the Bank of Korea explained, adding, “The patent fees are likely to continue for years down the road, examples of which include that derived from the seven trillion-won diabetes medicine export contract concluded last year by Hanmi Pharmaceuticals and Sanofi.”
Large South Korean corporations’ IPR trade deficit in relation to the United States decreased, too. Between the fourth quarter of last year and the following quarter, the deficit more than halved from US$2.44 billion to US$1.03 billion. Their IPR imports related to electrical and electronics products, in particular, dropped from US$2.22 billion to US$1.89 billion while their IPR exports related to such products edged down from US$1.07 billion to US$940 million.
During the period, South Korea recorded an IPR trade surplus of US$470 million with respect to China and US$410 million with respect to Vietnam.