Foreign trade figures of South Korea

Foreign Trade in Figures

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 the Regional 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.