The export-oriented policies of South Korea are one of the most important factors in its economic success. The country was the world's sixth-largest exporter of goods and the eighth-largest importer of goods in 2022 (WTO), with trade accounting for 97% of its GDP (World Bank). In the same year, the country exported mainly electrical and electronic equipment (16.5% of the total), petroleum oils (9%), motor cars (7.6%), telephones (4.2%), and parts and accessories for vehicles (1.9%). Conversely, petroleum oils (18.1%), electronic integrated circuits (8.5%), petroleum gas (7.8%), coal (3.8%), and machines used for the manufacture of semiconductors (2.8% - data Comtrade).
South Korea is heavily integrated into international trade and finance and is subsequently highly vulnerable to external influences, especially from China, which is its main trade partner (22.8% of total exports in 2022), followed by the United States (16.1%), Vietnam (8.9%), Japan (4.5%) and Hong Kong (4%). Its main suppliers are China (21.1%), the United States (11.2%), Japan (7.5%), Australia (6.1%) and Saudi Arabia (5.7% - data Comtrade). South Korea has concluded free-trade agreements with many countries (the last one with five Central American countries) representing more than 70% of the global economy. The country recently decided to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was signed by 11 Asia-Pacific countries in March 2018. On the 15th of November 2020, South Korea signed theRegional Comprehensive Economic Partnership(RCEP) with 14 other Indo-Pacific countries. This free trade agreement is the largest trade deal in history, covering 30% of the global economy. It includes the Association of Southeast Asian Nations (ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and ASEAN’s free trade agreement partners (Australia, China, India, Japan, New Zealand and the Republic of Korea). The RCEP covers goods, services, investment, economic and technical cooperation. It also creates new rules for electronic commerce, intellectual property, government procurement, competition, and small and medium-sized enterprises.
South Korea’s trade balance is structurally positive. According to WTO, exports of goods amounted to USD 683.5 billion in 2022, while imports reached USD 731.3 billion (+6% and +18.9% y-o-y, respectively). As per services, exports stood at USD 133 billion against USD 136 billion in imports. Despite overall exports reaching an all-time high, 2022 saw South Korea’s largest-ever trade deficit on high global energy prices. According to preliminary governmental figures for 2023, exports declined 7.4% as restrictive monetary policies in many countries and a slowing Chinese economy weakened demand for Korean goods. Moreover, South Korea experienced a trade deficit of USD 18 billion with China, marking the first time in 31 years that such a bilateral shortfall occurred between the two countries.
Source:World Bank- Latest available data.
FAQs
In 2022, South Korea exported a total of $705B, making it the number 5 exporter in the world. During the last five reported years the exports of South Korea have changed by $104B from $601B in 2017 to $705B in 2022.
What is South Korea's balance of trade? ›
Data are in current U.S. dollars. South Korea trade balance for 2022 was $0.12B, a 99.82% decline from 2021. South Korea trade balance for 2021 was $64.65B, a 6.68% increase from 2020. South Korea trade balance for 2020 was $60.60B, a 31.3% increase from 2019.
How much does South Korea trade with the US? ›
U.S. goods and services trade with Korea, South totaled an estimated $224.4 billion in 2022. Exports were $94.4 billion; imports were $130.1 billion.
What is the balance of trade in South Korea in 2024? ›
South Korea recorded a trade surplus of 3830 USD Million in August of 2024. Balance of Trade in South Korea averaged 1074.17 USD Million from 1966 until 2024, reaching an all time high of 13419.36 USD Million in September of 2017 and a record low of -12674.91 USD Million in January of 2023.
What is the Foreign Trade Act South Korea? ›
The purpose of this Act is to contribute to the growth of the national economy by promoting foreign trade, establishing a fair trade system, maintaining international balance of payments, and expanding commerce.
Is South Korea a free trade country? ›
Korea has Free Trade Agreements with ASEAN, Australia, Canada, Chile, China, Colombia, India, New Zealand, Peru, Singapore, the European Union, and the European Free Trade Association (Norway, Switzerland, Iceland and Liechtenstein), U.S., Turkey, and Vietnam.
What is the main source of income in South Korea? ›
South Korea relies upon exports to fuel the growth of its economy, with finished products such as electronics, textiles, ships, automobiles, and steel being some of its most important exports.
What does South Korea produce the most? ›
The country has displayed global competitiveness in various fields such as mobile phones, semiconductors, automobiles, chemicals, and steelmaking. In recent years, its cultural content, including music, gaming, and webtoons, is emerging as an essential industry in itself, taking the lead in the Korean economy.
What is the trade policy of South Korea? ›
Currently, Korea's trade policy centers on strengthening supply chains and integratingitself into the reshaping global value chains (GVC). The country is also contributing to globalrule-making, with a particular focus on digital transformation and the net-zero transition.
Is South Korea a good country to trade in? ›
South Korea's trade balance is structurally positive. According to WTO, exports of goods amounted to USD 683.5 billion in 2022, while imports reached USD 731.3 billion (+6% and +18.9% y-o-y, respectively).
The U.S.-Korea trade agreement gives American companies additional access to Korea's $580 billion market in these major services and more – giving American services companies a chance to build on an already-strong export record and to support more well-paying services jobs here at home, over and above the 70,000 jobs ...
What are South Korea's trade barriers? ›
Tariffs and Taxes
Korea maintains particularly high tariffs on a number of high value agricultural and fishery products. Korea imposes tariff rates of up to 30 percent on nuts and 35 percent and higher on most dairy products.
What percentage of GDP is trade in South Korea? ›
Trade is the sum of exports and imports of goods and services measured as a share of gross domestic product. South Korea trade to gdp ratio for 2022 was 96.54%, a 16.34% increase from 2021.
Is South Korea's economy booming? ›
South Korea, the world's 13th largest economy and a leader in high-tech industries, offers strong opportunities for U.S. businesses. However, exiting the pandemic, Korea's economic growth has been relatively slow, recording 4.15 percent growth in 2021 and 2.59 percent growth in 2022.
How much trade does Korea do with China? ›
South Korea also recorded an US$18 billion trade deficit with China, the first bilateral deficit with China in 31 years. South Korean exports to China in 2023 dropped 20% year-on-year, to $124.8 billion, while imports from China dipped 8% year-on-year, to $142.8 billion.
Who does South Korea trade with the most? ›
Korea, Rep. top 5 Export and Import partners
| Market | Trade (US$ Mil) | Partner share(%) |
|---|
| China | 162,913 | 25.28 |
| United States | 96,299 | 14.94 |
| Vietnam | 56,729 | 8.80 |
| Hong Kong, China | 37,465 | 5.81 |
1 more rowHere's a list of South Korea's top imports in 2023:
- Oil & Mineral Fuels. ...
- Electrical Machinery. ...
- Industrial Machinery. ...
- Ores. ...
- Precision Instruments. ...
- Motor Vehicles & Parts. ...
- Iron & Steel. ...
- Organic Chemicals.
South Korea relies upon exports to fuel the growth of its economy, with finished products such as electronics, textiles, ships, automobiles, and steel being some of its most important exports.
What is South Korea's main industry? ›
The main industries include textile, steel (with POSCO being the world's seventh-largest steelmaker), car manufacturing, shipbuilding and electronics (South Korea is the world's second-largest producer of semiconductors, which represents its main export).
