South Korea logged a trade deficit with the European Union last month as imports spiked from the region after both implemented a free trade deal, customs data showed Monday.
The free trade agreement (FTA) between South Korea and the EU went into effect on July 1.
Under the deal, both sides will eliminate or phase out tariffs on 96% of EU goods and 99% of South Korean goods within three years after the accord takes effect, South Korea''s (Yonhap) reported. According to the data by the Korea Customs Service, South Korea''s trade deficit with the EU amounted to US$60 million in July, the first shortfall that the nation has logged with the region since 2000. The nation''s exports to the EU fell 12% on-year to $4.08 billion last month as sales of semiconductors, wireless communications and video equipment contracted sharply. The decline was ascribed to heightening uncertainty there due to spreading fiscal concerns. Imports, meanwhile, spiked 34% to $4.14 billion in July as lowered tariffs and a strong local currency helped strengthen price competitiveness of European goods here. Automobiles, machinery, pork and cheese were among those European goods that registered marked import growth during the cited month, the data showed.