3 Years In
The KORUS FTA export utilization rate was 76.2 percent last year, and 69.0 percent higher than the total FTA utilization rate. This is the third year after the free trade agreement between Korea and the U.S. went into effect.
In particular, the growth rate of exports to the U.S. last year increased to 13.3 percent compared to the previous year’s 4.1 percent increase from 2012, the first year of the FTA taking effect.
The Ministry of Trade, Industry and Energy (MOTIE) and the Korea International Trade Association (KITA) issued a report on the Korea-U.S. FTA trade and investment trend on March 12, celebrating the third year of the FTA taking effect on March 15.
According to the MOTIE and KITA, although the trade size increased and the share of Korea's exported products in the U.S. market rose during the last three years, some products also suffered from increased imports from the U.S.
The trade size between Korea and the U.S. increased to US$115.6 billion last year, up 11.6 percent from a year ago. This figure is quite high when compared to the total Korean trade amount, which increased 2.1 percent. The trade size of duty benefit products from the FTA increased 6.7 percent from the previous year, while that of non-benefit products increased 15.6 percent.
Imports from the U.S. decreased 2.9 percent in 2012 and 4.2 percent in 2013, respectively, but increased 9.1 percent last year.
By industry, some profited while others did not. The overall trade performance was good. The share of Korean products in the U.S. import market was 2.97 percent in 2014, which was an 0.40 percent increase from the 2.57 percent in 2011 before the FTA went into effect. The share of U.S. products in the Korean import market only increased by 0.12 percent to 8.62 percent from 8.50 percent in 2011. In summary, Korean products sold relatively more in the U.S. market after the FTA took effect.
More specifically, Korea’s imports of agricultural, livestock, and marine products from the U.S. showed only a 1.3 percent increase in the compound annual growth rate (CAGR) for three years. Imports of beef, pork, and chicken, which had been expected to sharply increase originally, showed a recovery after plummeting due to mad cow disease which occurred in the U.S., while imports of corn and wheat decreased instead due to a harvest depression in the U.S.
However, it is notable that imports of lobsters increased rapidly. Imports of U.S. lobsters, only US$795,000 worth in 2011, recorded an annual average growth rate of 272.3 percent with US$41 million in 2014. Seaweed, kimchi, and red ginseng among Korean agricultural, livestock, and marine products were representative products which showed increasing exports to the U.S.
The U.S. automobile industry enjoyed the greatest benefit from the FTA. The exports of U.S. automobiles showed a 38.0 percent annual average increase for the three years, from US$350 million in 2011 to US$910 million in 2014. The exports of chemical and industrial products, pumps, measuring instruments, and cosmetics, including medicine and medical supplies, also increased.