For the past 20 years, Korea has been going through a sort of film “renaissance” after experiencing a golden age in the 1960s and 70s.
KORUS FTA Results in Record Growth
The Korea-US Free Trade Agreement is proving its effectiveness as Korea’s trade with the United States hit an all-time high in 2018. That makes the United States the second largest trading partner for Korea.
It’s been just over seven years since the KORUS FTA was signed. According to the trade ministry, last year saw the fastest rate of trade increase between the two nations since 2014. In 2018, trade grew at a rate of 10.3 percent to reach $131.6 billion. What makes this milestone particularly notable is that it took place in the midst of the intense ongoing trade dispute between the U.S. and China. The United States now accounts for 11.5 percent of Korea’s total trade, trailing only China, which makes up 23.6 percent.
Following concerns raised about the original Free Trade Agreement that was reached during the previous Administration, Korea renegotiated the terms of the agreement, with both countries agreeing to the new conditions in September. President Donald Trump, during the meeting with Korean President Moon Jae-in to sign the new FTA, called it a “great day” for both countries.
“From day one, I promised the American people that I would renegotiate our trade deals to ensure that our agreements were fair and reciprocal,” President Trump said at the time.
One of the more significant revisions in the Free Trade Agreement was the decision by the Korean government to accept U.S. safety requirements on vehicles imported from the United States. Previously, those vehicles needed to meet Korean standards, which differed from the American version. As a result, there was an 8.8 percent increase in U.S. car imports, to a total of $1.8 billion. This was after a 2.9 percent decline during the previous year. While there may not be a direct connection to the revised trade agreement – which takes effect this year – it is widely viewed as a signal that Korea-U.S. trade increase will continue to grow.
In addition to the increase in trade between the two nations, Korea’s trade surplus fell 23 percent, the lowest level since the agreement was first signed. The Korean government has attributed the smaller surplus primarily to an increase in fuel imports from the U.S., including crude, liquefied petroleum gas, and natural gas.