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Korus FTA has increased U.S. exports by up to $5.3 billion: ITC report

According to Pulse by Maeil Business News Korea,

A United States (U.S.) government report showed on Wednesday that its free trade agreement (FTA) with South Korea has resulted to $4.8 billion to $5.3 billion increase in total exports, the second-largest amount generated among 13 similar trade pacts implemented by the U.S.

According to a report titled “Economic Impact of Trade Agreements Implemented under Trade Authorities Procedures” drawn up by the International Trade Commission (ITC) of the Department of Commerce, the Korea-U.S. FTA, often dubbed as Korus FTA, has added at least $4.8 billion to overall U.S. exports. It is the second-largest amount after the North American Free Trade Agreement (NAFTA) that generated the biggest increase in U.S. exports of at least $24.2 billion.

The latest report comes a day after U.S. Republican presidential candidate Donald Trump criticized the Korus FTA, saying that the deal has increased U.S. trade deficits and led to job losses. He argued that “this deal doubled our trade deficit with South Korea and destroyed nearly 100,000 American jobs.”

The report, however, gave a positive analysis on the Korus FTA, noting that the trade pact has brought about $1.8 billion to $2.1 billion benefit to the “U.S welfare”., the largest among a 13 trade deals concluded by the U.S. The Korus FTA also increased U.S. imports by $5.1 billion to $5.7 billion.

The commission’s report also analyzed that the Korus FTA improved U.S. bilateral merchandise trade balance by $15.8 billion last year. This means that although the U.S. saw a $28.3 billion deficit in its merchandise trade with Korea last year, if it wasn’t for the Korus FTA, the trade deficit would have grown to $44 billion.

The average annual growth of U.S. direct investment in Korea, however, slowed from an average gain of13 percent between 1999 and 2012 - before the Korus FTA went into effect - to 4 percent between 2012 and 2014. The trade agreement went into force in 2012 after years of tense negotiations.

By Lee Jin-myung

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (Jun. 30, 2016)

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