Lower surplus with U.S. offers Korea trade leverageKorea’s trade surplus with the United States fell last year, offering government officials in Seoul some leverage as they head into talks with Washington on revising the two countries’ free trade agreement.
The latest figures from the Ministry of Trade, Industry and Energy showed Korea’s trade surplus with the United States fell 22.7 percent last year to nearly $18 billion. It is the first time in five years that Korea’s trade surplus with the United States has fallen below $20 billion.
Usually, it is considered favorable for a trade surplus to increase. But since Korea faces mounting pressure from Donald Trump, who has used the United States’ trade deficit with Korea as a bulwark for his protectionist policies, the lower surplus offers Seoul officials a bit of relief.
As part of Trump’s endless campaign against unfair trade practices, his administration has been demanding changes to its free trade agreement with Korea. Under such pressure, the government has promised to reduce its trade imbalance with the United States, including importing $2.5 billion worth of American shale gas annually.
Last year, imports from United States rose 17.2 percent to $50.7 billion. The increase was led by petroleum imports, which surged 121.9 percent. Imported facilities for manufacturing semiconductors went up 102.8 percent.
On the other hand, Korea’s export to the United States fell. In particular, Korean auto exports, which the Trump administration has blamed for the deficit, fell 3.9 percent. Auto parts saw a much sharper drop of 15.6 percent.
The reduced trade surplus is expected to give Korea better negotiating power in future trade talks with the U.S. government.
BY HA NAM-HYUN, LEE HO-JEONG [firstname.lastname@example.org]
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