Home > Economy > Korea To Profit From Bilateral Trade With US.
Economy

Korea To Profit From Bilateral Trade With US.

By February 22, 2017 at 11:41 pm
A shipping container is transferred as a ship loaded with ex (Photo : Jean Chung/Bloomberg via Getty Images)

Korea particularly South Korea will continue to benefit from its bilateral trade with the United States. A report claimed that both countries mutually profit from this as U.S manufacturers also need intermediate goods from Korea to produce their own goods.

Korea International Trade Association revealed that the South Korea has a total of 46.3 percent of exports in the U.S last 2015. These goods, on the other hand, are accounted for perhaps 37 percent of the U.S. total imports.

With that figure, it only shows that South Korea was exporting goods essentially needed by the United States. This report as per Korea Times has been released despite the presence of the new administration which is imposing border adjustment tax.

But some were claiming that the trade balance must be considered and determined in terms of value added. Like what happened last 2014 when Korea posted a trade surplus of $34.5 billion with the United States. But its value-added trade came to $7.2 billion or 20.8 percent significantly lower than the other trade partners.

The other trade partners of U.S. Japan and China have also been affected by this value added. China's value-added trade surplus only accounted for nearly 54 percent of the total while that of Japan accounted for more that 30 percent of its overall trade surplus with the U.S.

According to the report, South Korea and the United States are having matching structures of industries. This means that the exports of Korea to the United States have a significantly less serious negative effect on employment and jobs in the United States as per Asia Matters for America.

Nevertheless, with all these reports, there is a need for South Korea to boost its added-value in terms of its outbound shipments. Perhaps, they can consider adding added-value accounted for about 63.3 percent of shipments from Korea in comparison with 87.2 percent and 78.9 percent with the United States and Japan respectively.

Like Us on Facebook