Half a year after Korus FTA, exports climbed 2.9%

Korea’s exports to the United States rose 2.9 percent six months after a free trade deal between Seoul and Washington took effect despite exports generally remaining, a report said yesterday.

According to the report released by the Korea International Trade Association (KITA), exports to the U.S. reached $30.6 billion between April and September this year, up 2.9 percent from the same period last year.

The Korea-U.S free trade agreement, or the Korus FTA, took effect in March, cutting or phasing out tariffs on 85.7 percent of U.S. goods and 87.3 percent of Korean goods within three years.

Over the six-month period, however, Korea’s overall exports contracted 3.7 percent on-year, while its shipments to China and Europe fell 3.2 percent and 7.9 percent on-year, respectively.

“Shipments of the tariff-cut products to the U.S. lent support to Korea’s exports,” said the KITA report.

The automobile industry, which includes auto parts manufacturers, led the increase, with exports of cars and components jumping 20.1 percent on-year.

Shipments of machinery and petrochemical products also posted double-digit growth during the period, it added.

However, exports of electronic devices fell 23.4 percent on-year, as the industry had enjoyed relatively lower tariff rates even before the FTA took effect, according to the report.

It also showed that a growing number of Korean exporters utilized the Korus FTA to their advantage, with an average 65 percent of products getting tariff benefits in September, up 6.7 percentage points from April.

Exports of goods that enjoyed tariff-free benefits from the Korus FTA accounted for 24.1 percent of Korea’s total outbound shipments, far lower than the average of some 20 countries that have trade pacts with the U.S., noted the report.

Yonhap