US-South Korea FTA: The importance of analyzing on an industry-level

My latest video post discussed the potential benefits of the U.S-South Korea free trade agreement. However, the U.S. trade deficit with South Korea in manufactured goods has increased since the agreement took effect in March of this year.

According to a U.S. Congress Joint Economic Committee report, U.S. exports in goods to South Korea dropped from US$4.2 billion in March to US$3.5 billion in July. U.S. Imports from South Korea increased from US$4.8 billion to US$5.4 billion during the same period.

The United States mainly imports computer and electronic products from South Korea. On an industry-by-industry scale, the United States holds a trade surplus with South Korea in food, chemicals and machinery, according to the same report.

I agree with the reports final conclusion that it still too early to draw a definitive conclusion about the impact of the agreement on the U.S. economy.

I would also go further to state that even if the agreement does not result in a trade surplus for the United States, it is not a zero-sum game on an industry level. Producers in the food, chemicals and machinery sectors benefit from increased access to the South Korean market, which, in turn, helps the labor market in those industries in the United States.

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About Dr. Sarita D. Jackson

is the President and CEO of the Global Research Institute of International Trade, a think-tank/consulting firm that examines trade policies and their impact on domestic businesses. Prior to heading GRIIT, Dr. Jackson was a tenured associate professor of political science in North Carolina and worked as a trade policy consultant for an Arlington-based consulting firm. She has participated in trade policy projects and conducted research on free trade negotiations in Botswana, Antigua and Barbuda, Dominica, Dominican Republic, Mexico and Panama. Dr. Jackson has also traveled to Chile and Argentina to study their political systems and economic integration policies.
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One Response to US-South Korea FTA: The importance of analyzing on an industry-level

  1. Joshua Bizzell says:

    It is amazing how the manufacturing of South Korea extends all of our imports to that country. I think that because of the increase of trade with South Korea in a way of bringing more imports than producing exports, it hurts the U.S. I think this is the reason why the U.S is in such a big hole–we are importing more than we export.

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