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The Power of Free Trade Agreements

Posted March. 02, 2007 07:02,   


Since the conclusion of the bilateral free trade agreement (FTA) with Singapore last March, Korea’s export to Singapore shot up, raising the trade surplus with the city-state sharply.

The Ministry of Finance and Economy said on March 1 that the export volume to Singapore for the 10 months from March to December 2006 after the agreement was $8.102 billion, a 19.9% increase from $6.757 billion during the 10 months of the pre-FTA period from May 2005 to February 2006.

In contrast, imports from Singapore were $4.943 billion during the same period after the deal, only 4.4% up from $4.734 billion before the FTA. So, Korea’s trade surplus with Singapore increased by as much as 56.2% to $3.159 billion during 10 months after the FTA.

Singapore’s investment in Korea rose 41.1%, from $314 million before the agreement to $443 million after the deal, while Koreans invested 20.5% less after the FTA at $318 million from $401 million.

In addition, the number of tourists surged between the two states.

Last year, a total of 454,700 Koreans visited Singapore, a 24.8% increase from the previous year, and 71,000 Singaporeans traveled to Korea last year, 9.6% more than the 64,800 that did in 2005.