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S KOREA TO GAIN US$40 BLN FROM FTA WITH JAPAN: REPORT.
SEOUL, Oct 1 Asia Pulse - A South Korean free trade agreement (FTA) with Japan is projected to give South Korea a US$40.8 billion annual trade surplus over the long term, according to a Japanese report published today.
In the first one or two years, South Korea may suffer a growing trade deficit due to Japan's competitiveness in manufactured goods. But in the long term, the situation will be reversed as Tokyo's investment and technology transfers tip the scales in favor of Seoul, the report predicted.
The study by Japan's Institute of Developing Economies said South Korea will likely have the benefit of enjoying an overall trade surplus of A$40.8 billion thanks to the backing of Japan's accumulated capital power, with its gross domestic product (GDP) growing 8.67 per cent, over 10 years.
In the short term, the country's economy will grow an extra 0.06 per cent, with its trade deficit with Japan increasing US$3.88 billion.
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