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S. Korean exports grow thanks to free trade pacts: report

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Published : 2014-03-30 14:45
Updated : 2014-03-30 14:45

A disabled couple expressed deep anger at American Airlines over a disparaging customer description note by the carrier’s employee, ABC reported on Friday, local time.

Free trade pacts that went into effect in the last decade played a role in fueling South Korean exports, a report by an international traders association showed Sunday.

According to the Korea International Trade Association, nine open trade arrangements reached so far allowed local companies to make further inroads into 46 countries, helped by the lowering of tariffs and other trade barriers.

It said the free trade agreement with Chile that went into effect in April 2004 led the two-way trade to grow an average of 16.3 percent annually, with the total volume hitting $7.12 billion last year from just $1.58 billion in 2003.

Exports to the South American country have grown an average of 16.9 percent in the past 10 years, with imports gaining 16 percent.

In the case of the trade pact with the Association of Southeast Asian Nations that went into full swing in June 2006, trade grew 11.8 percent on average annually, with outbound shipment gains hitting 14.4 percent. This is a higher rate of growth than the 8.1 percent export growth tallied for the entire country in the past seven years.

Numbers for the FTA with the European Union that went into effect in July 2011 revealed trade expanding an average 4.4 percent per year in the last three years.

For the trade agreement with the United States that has been in force for two years, South Korea's exports were up 5.1 percent. This is said be again better than the overall growth figures tallied in 2012 and 2013.

In terms of market share, South Korean made goods accounted for 2.8 percent of the world's largest consumer market, exceeding the previous 2.6 percent record reached in 2006, it said.

KITA said tariff rates slapped on South Korean-made goods, which stood at 5.28 percent in 2004 fell to 4.65 percent last year. This translates into tariff savings of $7.99 billion as of last year alone on assumption that South Korean companies took full advantage of the benefits.

The association, however, said that among exporters, only 61 percent made full use of FTAs.

"Of the 1,000 companies polled, 79.2 percent said FTAs helped exports and improved their bottom line, but 45.5 percent said it did not help them in any way," a KITA official said.

He said among small and medium enterprises with annual sales under 10 billion won, only 56.5 percent said they took advantage of the FTA.

On the other hand, KITA said that despite free trade pacts being reached, South Korean products lost market share in the four nations that make up the European Free Trade Association -- Iceland, Liechtenstein, Norway and Switzerland -- in the face of challenges posed by Chinese goods.

Overall, KITA said trade between South Korea and countries it has free trade pacts with made up 35.3 percent of the country's total trade in 2013, larger than 21.2 percent reported for its trade with China and 18.9 percent for Japan. (Yonhap)

 

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