GDP Could Increase to 80 Trillion Won; 340,000 New Jobs Could Be Added

GDP Could Increase to 80 Trillion Won; 340,000 New Jobs Could Be Added. May. 01, 2007 03:04. sanjuck@donga.com kong@donga.com.

When the Korea-U.S. Free Trade Agreement (KORUS FTA) takes off, it is estimated that Korea’s gross domestic product (GDP) will increase by as much as 80 trillion won and that 340,000 jobs will be created.

Productivity in the agricultural sector, however, will shrink by 670 billion won annually.

On April 30, 11 state-run research institutes and organizations including the Korea Institute for International Economic Policy (KIEP), Korea Development Institute (KDI), Korea Institute for Industrial Economics & Trade (KIET), and Korea Rural Economic Institute (KREI) released a report titled “Analysis of Economic Impacts of the KORUS FTA.” The Korean government will come up with countermeasures to negative impacts about the KORUS FTA by end of June based on the report.

According to the report, if the FTA, which will come into force in 2009, improves Korea’s productivity, the nation’s GDP will rise 0.6% point annually and increase as much as 80 trillion won over the next ten years.

The report estimates that 33,600 new jobs will be created annually or by a total of as many as 336,000 over the next ten years. Imports of U.S. agro-livestock products will lead to a decrease in prices and an increase in public welfare by 20 trillion won over the next decade. During the same period, Korea’s trade surplus with the U.S. is expected to go up 4.6 billion dollars (4.278 trillion won).

The KORUS FTA will lead to an annual increase of 5.5 trillion won in manufacturing production over the next 15 years, but during the same period, agricultural production will decrease by 669.8 billion won, and fishery production by 28.1 billion won. After the FTA takes off, jobs in the agricultural sector will go down by 10,000 over the next ten years.

Meanwhile, a high-ranking official at the Office of the United States Trade Representative (USTR) recently said, “The KORUS FTA is beneficial to the U.S. as well” and “I am positive about the passage of the deal at the U.S. Congress.”