By Kang Seung-woo



An additional opening of the manufacturing sector by an envisaged revision of the Korea-U.S. free trade agreement (KORUS FTA) is unlikely to lead to an increase in the real gross domestic product (GDP), a government report said, Friday.



However, it failed to precisely assess the impact of further opening up the agriculture and livestock markets.



It also could not predict how much it would negatively affect the economy if Korea makes big concessions to the United States in the face of President Donald Trump's threats. He has vowed to scrap the trade deal all together if Korea is too tough in the renegotiations.



The Korea Institute for International Economic Policy, the Korea Institute for Industrial Economics and Trade and the Korea Rural Economic Institute jointly issued an economic feasibility study on the renegotiation of the bilateral deal, which took effect in 2012.



According to the joint report, a low-level market opening would increase the real GDP by 0.0004 percent and consumer benefits by $12 million in Korea, while an amendment for a high-level opening would bring about gains of 0.0007 percent in real GDP and $24 million in consumer welfare.



The real GDP is an inflation-adjusted measure reflecting the value of all goods and services.



"The number of remaining items is limited and tariff levels are already low. So an additional opening of the manufacturing sector is not expected to produce any notable results," Kim Young-gui, a researcher at KIEP told a public hearing.



"The macroeconomic effects could rise if the two sides abolish or lower non-tariff barriers and adjust other sectors."



The report didn't disclose figures on each sector of the industry due to concerns that it would reveal Korea's strategies before entering full-fledged renegotiations with the U.S.



The report came as the two nations are about to launch renegotiations of the five-year-old trade pact soon after President Trump calls it "quite unsuccessful and not very good for the U.S."



Trump was highly expected to strongly ask for renegotiation of the KORUS FTA during his two-day state visit to Seoul this week; but for some reason did not voice any requests.



The U.S. is Korea's second-largest trading partner with its shipments to the U.S. amounting to $66.5 billion last year, while Korea is the U.S.'s seventh-largest partner at $42.3 billion.



The report also showed that the bilateral pact has widened trade and improved market access between Seoul and Washington.



The U.S. share of the Korean market has advanced from 8.3 percent in 2012 to 11.1 percent in the first half of this year, while the corresponding figure for Korea went up from 2.6 percent to 3.1 percent, it noted.



Meanwhile, representatives of the nation's agriculture and livestock industry staged a protest and criticized the report, claiming it was "unilateral" and "superficial."



The protesters urged the government to stand firm against any U.S. demands for a further lowering of tariffs on agricultural products.



They said such a move would devastate the farming sector. The Ministry of Trade, Industry and Energy said it would reflect their opinion in upcoming renegotiations.







