Bilateral Trade between the U.S. and Korea Boosted by KORUS FTA

The KORUS FTA commemorated its 10th anniversary on March 15. Last year, South Korean automakers’ U.S. market share was 10 percent and South Korea’s automobile, auto parts, semiconductor, computer and petroleum product exports to the United States increased without exception. For the past 10 years, South Korea’s goods trade with the United States increased more than 66 percent.

The Ministry of Trade, Industry and Energy announced on March 14 that the bilateral trade increased 66.1 percent from US$101.8 billion to US$169.1 billion from 2012 to 2021, when South Korea’s trade with the entire world increased 17.9 percent from US$1.0675 trillion to US$1.2595 trillion.

South Korea’s exports to the United States increased 61.1 percent from US$58.5 billion to US$95.9 billion from 2012 to 2021. In that period, South Korea’s imports from the United States increased 69 percent from US$43.3 billion to US$73.2 billion and the former’s trade surplus with the latter increased from US$15.2 billion to US$22.7 billion. Compared to the period of 2002 to 2011, the United States’ investment in South Korea increased 98 percent to US$48.2 billion and South Korea’s investment in the United States increased 282 percent to US$113 billion.

With the agreement in effect, South Korea’s semiconductor, computer and refrigerator exports to the United States jumped 246.6 percent, 259 percent and 130.9 percent, respectively. In addition, its synthetic resin and battery exports to the United States soared 244.9 percent and 634.6 percent, respectively. “Also, on an annual average basis, South Korea’s agricultural and livestock product exports and fisheries product exports to the United States increased 95.2 percent and 99.4 percent compared to the previous five-year period, respectively,” the ministry said.

South Korea’s U.S. crude oil imports increased from zero to US$8.4 billion from 2013 to last year. Likewise, natural gas and LPG imports surged from US$50 million to US$4.8 billion and from US$100 million to US$4.8 billion, respectively. In addition, semiconductor manufacturing equipment and automobile imports rose from US$2.7 billion to US$6.9 billion and from US$700 million to US$3.7 billion, respectively.

At present, the United States is the largest trade partner for South Korea in the service industry. Their service trade was US$43.1 billion in 2020, 22.3 percent of South Korea’s total service trade. With the FTA in effect, their average annual trade volume in the service sector increased 2.6 percent to US$46.2 billion.

Last year, their bilateral trade added up to US$169.1 billion, up 28.5 percent from a year ago. Specifically, exports increased 29.4 percent to US$95.9 billion and imports increased 27.3 percent to US$73.2 billion. When it comes to the imports, the amount and the rate of increase both reached the highest since the implementation of the FTA.

Especially, the annual exports of preferential tariff items increased from US$12.82 billion to US$41.27 billion from 2012 to 2021. Last year, the exports of such items accounted for 43 percent of the total exports in the KORUS FTA. Those of non-preferential tariff items increased 19.7 percent under the FTA.

“Last year, South Korean products’ share in the U.S. import market rose from 3.3 percent to 3.4 percent and South Korean automakers’ share rose from 8.5 percent to 10 percent,” the ministry explained, adding, “South Korea’s auto parts exports to the United States are also continuing to increase and solid state drive exports increased 26 percent in 2021 alone.”