Invest KOREA

According to Yonhap News,

(SEJONG = Yonhap News) South Korea's trade volume has more than doubled in the 10 years since the country implemented its first-ever free trade agreement (FTA) with Chile, a local trade organization said Thursday.

The country enacted its FTA with Chile 10 years ago on April 1.

The deal had prompted a wide range of concerns at the time over the possible fallout for the country's farmers and agricultural market, along with much doubt over its much-advertised benefits.

Such concerns and questions have yet to disappear completely even though the country has since signed and implemented eight other bilateral and multilateral FTAs that involve 45 other countries.

Officials from the Korea International Trade Association (KITA) claim the growth of the country's overall trade volume over the past 10 years can at least confirm the positive impact of FTAs on trade.

In 2003, South Korea's overall trade volume was US$478.3 billion. After 10 years and nine free trade deals, the trade volume reached over $1.07 trillion last year, breaching the $1 trillion mark for the third consecutive year.

The volume of South Korea's bilateral trade with Chile more than quadrupled from some $1.57 billion to nearly $7.12 billion over the cited period.

The trend can also be seen in the agricultural sector.

South Korea's overall shipments of agricultural and fishery products more than doubled from about $25.4 million in 2004 to over $54.8 million in 2012, with its imports also growing from $22.4 million to $51.9 million over the same period, according to the Ministry of Agriculture, Food and Rural Affairs.

However, many still remain skeptical of the claimed benefits of the FTA.

"In economics, the gross domestic product (GDP) grows when there is a trade surplus, but the country's trade deficit (with Chile) has instead expanded since the Korea-Chile FTA was implemented," an expert said.

The government said not all benefits of a FTA can be measured in numbers.

"The growth of trade volume is only part of the benefits of a FTA, which may offer many, greater benefits in terms of improved market conditions for consumers afforded by price cuts and intensified competition between local and foreign producers," a government official said, asking not to be identified.

As of the end of 2013, South Korea had FTAs with 46 countries that together generated 55 percent of global GDP. The country seeks to expand its so-called trade territory through FTAs to 71 percent of global GDP in 2017, the Ministry of Trade, Industry and Energy said earlier.

To this end, the country is currently engaged in negotiations for eight new FTAs.