Running head: DISCUSSION ABOUT CANDIDATE STATES AND TRADE GROUP 1 Discussion about Candidate States and Trade Group Hoi Tu Phuoc Columbia Southern University
DISCUSSION ABOUT CANDIDATE STATES AND TRADE GROUP 2 Part I Evaluate Influence of The Bilateral Agreement Between China & South Korea To The US The US is the biggest economy in the world and nations that have Free Trade Agreement (FTA) with the US government will have big opportunities to expand trading and develop economically. Korea had FTA with the US from 2012 but China has not got FTA with the US government yet (Office of The US Trade Representative, n.d.). China and Korea are nations that have a strong economy, the economy of China ranks the second position and the Korea economy ranks 11th position in the world (International Monetary Fund [IMF], 2020). In order to increase the trading transaction between two nations, China and Korea signed the FTA in June 2015. When China and Korea have executed trade transactions according to FTA, trade transaction balance between the US-China and the US – Korea has been affected. The balance of trade is the value of a country's exports minus its imports. A trade surplus (positive balance) occurs when export values exceed import values and a trade deficit (negative balance) exists when the value of exports is less than imports (Amadeo, 2019). The Advantages and Disadvantages of the US to Continue with South Korea and China Analyze trade transaction data . Korea and China have been started trade transactions since the establishment of diplomatic relations in 1992. The trade ratio of Korea with China has been growing up to 25% in 2014. In 2014, China was the highest export country of Korea with export value was 145,288 million dollars, accounting 25,4 percent of Korea export value and Korea’s highest import country was China, import value was 90,082 million dollars, accounting 17.1 percents of China imports value. Before FTA was signed, the percentage of export and import of Korea and China in 2014 was shown in table 1 and table 2 show export and import between both countries from 2005 to 2019.
DISCUSSION ABOUT CANDIDATE STATES AND TRADE GROUP 3 Table 1. Export and Import of Korea and China in 2014. Cited in (Kim & Lu, 2016). Table 2. Export and import between China –Korea from 2005 to 2020. Korea exports to China Korea imports from China Year Value ($1000) Inc. rate (%) Value ($1000) Inc. rate (%) 2010 71,573,603 31.9 71,573,603 31.9 2011 86,432,238 20.8 86,432,238 20.8 2012 80,784,595 -6.5 80,784,595 -6.5 2013 83,052,877 2.8 83,052,877 2.8 2014 90,082,226 8.5 90,082,226 8.5 2015 90,250,275 0.2 90,250,275 0.2 2016 86,980,135 -3.6 86,980,135 -3.6 2017 97,860,114 12.5 97,860,114 12.5 2018 106,488,59 2 8.8 106,488,59 2 8.8 2019 107,228,73 6 0.7 107,228,73 6 0.7 (Korea International Trade Association [KITA], 2020).
DISCUSSION ABOUT CANDIDATE STATES AND TRADE GROUP 4 Figure 1. Korea GDP from 2015 to 2019 2015 2016 2017 2018 2019 0 500000000000 1000000000000 1500000000000 2000000000000 2500000000000 Korea GDP Axis Title Axis Title (Korea International Trade Association [KITA], 2020) From 2015 to 2019, Korea export value to China increased $25 billion, accounting for 1,2% Korea GDP and from 2019 up to now, due to the influence of the trade war between the US-China, the export value of Korea to China was declined. China's export value to Korea has increased continuously.