The Peninsula

How Korea’s Trade with Its FTA Partners Performed in 2015

By Troy Stangarone

With the global economy slowing and Korean merchandise exports and imports down in 2015 we recently looked at how U.S.-Korea trade compared to Korean trade in general and U.S. trade more broadly. However, Korea has one of the world’s most expansive network of free trade agreements. In this post we explore how U.S.-Korea trade has fared in relations to Korea’s other FTA partners.

For this look at Korea’s trade with its FTA partners we only looked at countries whose FTAs with Korea had been in place for all of 2015. Korea’s FTAs with China and Vietnam were not implemented until December of 2015 and are excluded as a result.

While Korean imports overall dropped by 16.9 percent most of Korea’s FTA partners experienced more significant declines in their exports to Korea, with Canadian exports dropping by 26.8 percent and Australian exports down by 19.4 percent for example. On the whole, the United States outperformed all of Korea’s other FTA partners, with the exception of Chile and Turkey, with a small decline in exports to Korea of 2.2 percent. In Chile’s case strong exports of pork and wood products, along with precious metals, helped Chile’s exports to Korea to rise by 36 percent, while Turkey saw growth in exports of airplane and helicopter parts, fuel pumps, and engine parts for an overall increase of 20.5 percent in Turkish exports to Korea.

Korea’s exports were down a less extreme 8.8 percent in 2015. While exports to most of Korea’s FTA partners declined, its exports to the United States again outperformed rising by 3.3 percent. The only two destinations that saw more significant growth were Australia and the European Free Trade Association (EFTA)[1] with increases in exports of 5.4 percent and 211.9 percent, respectively.

Exports to Australia rose on strong growth in exports of steel, motor fuels for internal combustion and aluminum alloys. In the case of EFTA the strong growth in exports from Korea can be explained in a few ways. First, total trade with EFTA compared with U.S.-Korea trade is relatively small. Total merchandise trade in 2015 was only $11.4 billion, as opposed to$113.8 billion with the United States, and exports rose from $2 billion in 2014 to $6.3 billion in 2015. The surge in exports to EFTA were largely built on significant growth in exports of drilling ships and other light weight vessels – most likely from a onetime sale.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Chris Humphrey’s photostream on flickr Creative Commons.