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SEOUL, March 13 (Yonhap) -- The free trade deal between South Korea and the United States has helped boost bilateral trade, but a trade row may arise down the road due to unresolved issues, a report said Wednesday.
After years of hard negotiations and ratification procedures, the free trade agreement, dubbed the "KORUS FTA," went into effect on March 15 last year, following a similar deal with the European Union that took effect in July 2011.
According to the report compiled by the Hyundai Research Institute, South Korea's exports to the U.S. gained 4.1 percent on-year last year to reach US$58.5 billion, while the country's overall outbound shipments sank 1.3 percent on-year amid the global economic slump.
Auto parts exports to the U.S. soared 12.4 percent on-year last year, and shipments of petrochemical goods jumped 11.9 percent over the cited period.
Imports from the U.S. declined 2.8 percent on-year to $43.3 billion due to a slump in domestic demand, according to the report.
The KORUS FTA was expected to help South Korea's economy expand by more than 5 percent in the long run since it can lead to more exports by reducing various trade barriers, a study showed earlier. The deal could also create about 350,000 jobs that could ease local labor market conditions, a report compiled by 10 local think tanks claimed earlier.
The report also predicted South Korea will see its trade surplus with the U.S. increase by $140 million annually over the next 15 years after the FTA goes into effect. The nation's total global trade surplus will expand by an annual average of $2.77 billion, it forecast.
But the Hyundai Research Institute said a bilateral trade tussle may rise as the two countries have to resolve still contentious issues such as the beef trade and so-called investor-state dispute (ISD) settlement scheme.
The U.S. may ratchet up pressure on the Seoul government to lift restrictions on the beef trade, the report said.
Under a deal nearly five years ago, South Korea only imports American beef produced from cattle under 30 months of age due to worries over mad cow disease.
Also, the ISD mechanism between the Seoul government and foreign investors has been one of the key sticky issues, as some politicians here claim that the scheme could undermine South Korea's legal independence and take a toll on South Korea.
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