June 30, 2014 12:47
Korea's trade deficit with the European Union has ballooned since the two sides signed a free trade agreement.
Despite the fiscal crisis in the eurozone, Korea's exports to the region increased steadily, but imports of agricultural products from the EU also surged, resulting in the rising trade deficit.
An official at the Ministry of Trade, Industry and Energy said Sunday, "The weak euro led to a US$7.4 billion deficit in the trade account with the EU from July 2013 to June of 2014."
Korea managed to achieve a $1.8 billion trade surplus with the EU in the first year after the FTA went into effect but posted a $4.6 billion deficit in 2013.
As the economic slump drags on in the EU, overall imports there have dropped, while the weakness of the euro has also impacted the bottom lines of Korean exporters. Also, Korean manufacturers have begun to import machinery from the EU, shifting from suppliers in Japan, while imports to Korea of European pork, wheat, wine, beer and other agricultural and food products rose almost 19 percent since 2013.
Exports to the EU of cars and tires shifted into growth mode three years after the FTA went into effect, while shipments of synthetic materials, plastic products and lighting equipment also rose 7.8 percent.
Kwon Pyong-oh at the ministry said, "China, Japan and the U.S. saw their exports to the EU drop, but Korea's shipments to the region continue to rise."
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