FTAs sustaining S. Korea's economic growth: gov't

June 21, 2012 10:26 pm 

SEOUL, June 21 — Free trade pacts reached with the European Union and the United States have helped sustain South Korea's growth against sluggish global economic growth, the government said Thursday.

The Ministry of Strategy and Finance said the two free trade agreements have acted as bulwarks for the economy, which has been rocked by economic uncertainties triggered by fiscal woes in eurozone countries and slower-than-expected growth in the United States and China.

While the country's overall exports fell 2.5 percent on-year for the three-month period after the FTA with the United States went into effect on March 15, shipments to the single largest economy have expanded 8.4 percent, it said.

The ministry said products that directly benefited from the bilateral trade agreement, also called the KORUS FTA, shot up 16.8 percent, compared to 3.8 percent gains for goods that were not immediately affected.

Demand for South Korean auto parts and refined petroleum products led the surge, with demand for certain miscellaneous household products growing by double digits as they pushed out Chinese rivals.

In regard to the FTA with the EU, outbound shipment numbers dropped 12.1 percent on-year since the pact was implemented in July last year, with the losses mainly caused by the 47.3 plunge in ships being delivered.

The findings, however, showed exports of autos, car parts, and refined petroleum goods jumping 20.2 percent, with products such as polyester gaining considerable market share in Italy and Belgium.

The ministry, in charge of setting the country's macroeconomic policies, added imports from the United States fell 6.3 percent on-year in the past year overall, but products such as animal feed, fruits and nuts subject to lower tariffs rose 4.2 percent.

For Europe, it said the FTA bolstered imports by 13.5 percent, with gains being led by dairy products and personal accessories such as watches and bags.

The ministry, meanwhile, said local companies took steps to take full advantage of the FTAs with the EU and the United States, with 59.2 percent and 79.8 percent of exporters benefiting from favorable duties. (PNA/Yonhap)

hbc/rsm

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