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Imports up, exports down one year after Korea-EFTA FTA

Korea Times | 09-03-2007

Imports Up, Exports Down One Year After EFTA FTA

By Jane Han
Staff Reporter

A year after a trade deal between Korea and the European Free Trade Association (EFTA) went into effect last September, the nation’s largest trade group said Monday that imports from the four-nation bloc hiked while exports dipped heavily.

Before the free trade agreement (FTA) went into effect, exports to the EFTA, which consists of Switzerland, Norway, Iceland and Liechtenstein, accounted for more than $1.5 billion annually, but the amount plunged 35 percent to about $969 million, according to a report released by the Korea International Trade Association (KITA).

Imports stood at less than $2 billion, but shot up 53.7 percent to more than $2.7 billion, it said.
KITA attributed the trade imbalance to various irregular factors,'' such as a steep jump in ship, gold and artworks exports right before the FTA, alongside the rising local demand for capital goods, which called for more imported goods.Because there was a sudden increase in exports, the pre- and post-FTA figures may not look too impressive,’’ said KITA researcher Lee Joong-ho. ``But if those exports were made after the trade deal took effect, it would’ve seemed like the FTA definitely pushed up Korean exports.’’

If such odd factors were eliminated, Lee says there was about a 6.9 percent increase in overall trade, in which automobiles and industrial machine and tools performed the best.

The Korea-EFTA FTA was the country’s third free trade pact, but the first with a regional economic bloc.

 source: Korea Times