South Korea's free trade pact with the European Union, which went into effect in July 2011, allowed growth of local exports to the giant economic bloc, helping Asia's fourth-largest economy to outpace rivals, a report showed Sunday.
According to data by the Korea International Trade Association, exports to the EU following the free trade agreement consistently did better than those of China, Japan and Taiwan, despite weak demand caused by the recent European financial crisis that hurt trade across the board.
KITA said that in the July 2011 to June 2012 period, outbound shipments surged 18.4 percent on-year, while numbers for rivals stood still or contracted.
In the second year that ran from July 2012 through June of last year, Seoul's exports suffered setbacks as the European continent was rocked by mounting economic uncertainties and some countries tackled their debt issues, but its 0.4 percent on-year contraction was mild compared with losses sustained by others.
Japanese exports were down 10.1 percent, with numbers for China and Taiwan backtracking 1.3 percent and 4.7 percent, respectively.
In the past 12 months, exports grew 4.1 percent from the year before as the EU economies started gaining buoyancy, which is again better than 2.1 percent and 3.8 percent growth posted for China and Taiwan. Japan's exports were down 6.5 percent.
KITA said while exports did well compared with those of neighboring countries, some industries did better than others.
Petrochemical shipments grew an average 20 percent each year for the past three years, with sales of automobiles, steel products, textiles, clothing and farm goods all doing well.
It said exports of car parts, machinery and shoes that lost ground initially, are showing signs of recovery.
On the negative side, exports of electronics and petroleum products have struggled.
Of the 28 members in the union, the benefits of the FTA were felt the most in Britain, while shipments to Germany and France have just started to recover recently, after contracting for some time.
"Britain was relatively insulated from the European financial crisis that helped exports," the trade agency said.
It added that outbound shipments to Portugal, Italy, Ireland, Greece and Spain, or the so-called PIIGS countries, have started to pick up pace, after economic reform measures carried out by policymakers have helped stabilize these markets.
The findings, moreover, showed exports to Eastern European countries like Poland, Hungary and the Czech Republic, where South Korean companies set up factories, have not done well in the past few years.
This is mainly due to the fact that economic woes facing many EU nations hurt demand for products made by factories owned by companies that import parts and materials from South Korea.
The latest report then said that South Korean exports to the EU will continue to grow, as the continent shows signs of steady economic recovery.
"EU's economy has grown for four consecutive quarters, with growth expected to reach 1.6 percent for 2014, up from 0.1 percent last year," the trade organization said.
It said the EU Commission, International Monetary Fund and Organization for Economic Cooperation and Development are all predicting growth to continue up till 2015. (Yonhap)