The Korea Institute for International Economic Policy (KIEP) said in its recent report that the KORUS FTA has been more advantageous for the United States rather than South Korea since its implementation in 2012.
According to the report, the imports of U.S. products to which preferential tariffs were applied increased by US$5.608 billion from 2012 to 2016 and the KORUS FTA accounted for 36.5% of the increment. Meanwhile, South Korea’s exports to the United States that benefitted from the KORUS FTA were US$3.162 billion, 17.2% of the total increase in exports. Although the latter exceeds the former in terms of absolute amount, this can be attributed to product competitiveness improvement, marketing expansion, and so on and the contribution of the KORUS FTA to the U.S. was more than twice that to South Korea.
On the investment side, the KORUS FTA contributed to US$989.11 million in South Korea’s investment in the U.S., which was equivalent to 35% of the total increment, whereas the figures were US$316.3 million and 29.3% vice versa. This means the U.S. took a larger portion in terms of job creation resulting from investment expansion. The KORUS FTA increased the number of jobs in South Korea only by 16,803 for five years.
The KIEP also pointed out that the increase in automobile exports from South Korea to the U.S. under the KORUS FTA was statistically insignificant. “Although the exports in 2016 increased by an average of 9.8% in comparison to the period preceding the tariff reduction, this has no statistical significance,” the institute explained, adding, “It cannot be said that the KORUS FTA contributed to South Korea in terms of car exports.”