South Korea’s trade deal with the United States reached this month is expected to boost Asia’s third-largest economy by as much as 6% over the next 10 years and create 340,000 new jobs, a study showed on Monday.
The deal, which is the biggest US trade pact in 15 years, needs to be approved by legislatures in both countries. Surveys in South Korea show the majority of respondents favor it.
The report estimated the economy would expand by as much as 6% over 10 years.
“Considering productivity increases, the growth will be 6%,” the study by 11 South Korean government-affiliated think tanks said.
The study, Seoul’s first since striking the deal in early April, also said that local consumers should benefit from lower prices due to decreased tariff rates, but farmers would suffer.
The deal was expected to lead to a loss of about 1,000 farming jobs a year in the next 10 years. By 2023, the loss in farm production could be about 1 trillion won ($1.07 billion), the study said.
US negotiators have faced criticism at home for failing to win enough concessions from Seoul, notably on agriculture and cars. But South Korea also faces an uphill battle in winning the approval of politically powerful farm votes.
South Korea’s exports to the United States are expected to rise by about $1.3 billion a year over the next 10 years while imports from the United States will grow by about $860 million a year over the same period, the study said.
Manufacturers such as carmakers are expected to be the biggest winners in South Korea, it said. The deal should also increase foreign direct investment in South Korea by about $2.3 billion to $3.2 billion a year over the next 10 years. ($1=930.8 Won) (Reuters)