South Korea-EU - trade in goods


Data extracted in April 2018.

Planned article update: April 2019.

Highlights


In 2017, among the EU's trading partners, South Korea was the eighth largest partner for both exports and imports of goods.

Manufactured goods dominate EU exports to South Korea and EU imports from South Korea.

Imports, exports and trade balance in goods between the EU and South Korea, 2008-2017

This article provides a picture of the international trade in goods between the European Union (EU) and South Korea. It analyses the type of goods exchanged between the two economies and the shares of each EU Member State in those exchanges.

This article is part of an online publication providing recent statistics on international trade in goods, covering information on the EU's main partners, main products traded, specific characteristics of trade as well as background information.

Full article

General overview

  • In 2016, South Korea was the sixth largest exporter of goods and importer of goods in the world with a share of 4.0 % of world exports and a share of 3.2 % of world imports.
  • In 2017, among the EU's trading partners, South Korea was the eighth largest partner for both exports and imports of goods.
  • EU trade in goods deficit with South Korea reduced from a EUR 14.0 billion in 2008 to only EUR 0.2 billion euro in 2017.
  • Manufactured goods have a share of 84 % of EU exports of goods to South Korea and 95 % of EU imports of goods from South Korea.
  • Among EU Member States, Germany is the largest importer of goods (EUR 9.6 billion) from and exporter of goods (EUR 18.0 billion) to South Korea.
  • Germany has the largest trade in goods surplus (EUR 8.4 billion) with South Korea while Slovakia (EUR 3.2 billion) has the largest trade in goods deficit.

EU and South Korea in world trade in goods

Figure 1a shows that the four largest exporters of goods account for almost half of the world exports in 2016. The largest is China (17 %) followed by the EU (16 %), the United States (12 %) and Japan (5 %). The same four also account for almost half of the world imports of goods but in different order. Here the USA (18 %) leads, followed by the EU (15 %), China (12 %) and Japan (5 %).

Figure 1a: The position of South Korea among the world's largest traders in goods, 2016
Source: Eurostat (ext_lt_introle)

Figure 1b has some more detail. South Korea is the sixth largest exporter of goods (EUR 448 billion, 4.0 %) and importer of goods (EUR 367 billion, 3.2 %) in the world, in both cases between Hong Kong and Canada. In exports it is only a little below Hong Kong (EUR 467 billion, 4.2 %) and some way above Canada (EUR 351 billion, 3.2 %). In imports the gap with Hong Kong (EUR 494 billion, 4.3 %) is somewhat larger while there is almost no difference with Canada (EUR 364 billion, 3.1 %).

Figure 1b: Top 25 importers and exporters of goods in the world, 2016 (EUR billion)
Source: Eurostat (ext_lt_introle)

Figure 2 focuses on the evolution of trade of goods in the EU and South Korea over the period 2007-2016. From 2007 to 2011 imports and exports (both indexed at 100 % in 2007) for both economies developed in similar fashion with a low point in 2009 followed by a recovery in which both exports and imports of South Korea grew more than those of the EU. For both economies exports continued to grow but after 2012 imports remained more or less constant or even fell in some years. This means that the cover ratio (exports divided by imports) of both economies increased. For the EU it passed the 100 % mark in 2013 and has remained just above it since 2012. For South Korea, except in 2008, it has always been above 100 %, peaking at 122 % in 2016. In 2016 both South Korean exports and imports fell ten percentage points.

Figure 2: Evolution of trade of goods in the EU-28 and South Korea (2007 = 100) and cover ratio (%), 2008-2017
Source: Eurostat (ext_lt_introle)

Record growth of EU imports of goods from South Korea in 2017

Figure 3a shows South Korea's trade of goods compared to the top four trading partners of the EU which were the United States, China, Switzerland and Russia. These four made up 43 % of all exports from the EU and 48 % of all imports to the EU.

Figure 3b has some more details and shows that in 2017, South Korea was the EU's eighth largest partner for exports of goods (EUR 50 billion, 2.7 %) between Norway (EUR 51 billion, 2.7 %) and the United Arab Emirates (EUR 43 billion, 2.3 %). For imports of goods it was also the EU's eighth largest partner (EUR 50 billion, 2.7 %) at some distance behind Japan (EUR 69 billion, 3.7 %) and before India (EUR 44 billion, 2.4%).

Figure 3a: The position of South Korea among the EU's main partners for trade in goods, 2017
Source: Eurostat (ext_lt_maineu)


Figure 3b: Top 20 import and export of goods partners of the EU, 2017
Source: Eurostat (ext_lt_maineu)

The EU recorded a trade in goods deficit with South Korea from 2008 to 2012 (see Figure 4). In this time span, trade between the two economies hit a low in 2009. Exports quickly recovered and except for 2016 continued to grow to a record height of EUR 50 billion in 2017. Imports also recovered, their growth was very small and uneven reaching EUR 42 billion in 2016. However from 2016 to 2017 there was a strong increase of more than EUR 8 billion to a record height of EUR 50 billion. Consequently, the trade surplus that the EU had since 2013 turned into a small deficit of EUR 0.2 billion in 2017.

Figure 4: Imports, exports and trade in goods balance between the EU and South Korea, 2008-2017 (EUR billion)
Source: Eurostat (ext_lt_maineu)

Manufactured goods dominate trade with South Korea

When breaking down imports and exports by SITC groups, the main categories driving the exports to South Korea are 'Machinery and vehicles' (49 %), 'Other manufactured goods' (20 %) and 'Chemicals' (15 %) (see Figure 5). Together these manufactured goods accounted for 84 % of EU exports. Manufactured goods dominated imports even more, with a share of 95 % in 2017. Here too 'Machinery and vehicles' (63 %) was the largest group, followed by 'Other manufactured goods'(18%) and 'Chemicals' (14 %). Between 2008 and 2017 the shares of the different product groups in exports changed very little. In contrast, in imports the share for 'Machinery and vehicles' dropped by almost ten percentage points while 'Chemicals' gained almost ten percentage points.

Figure 5: EU-28 exports to and imports from South Korea by SITC group, 2008 and 2017 (EUR billion)
Source: Eurostat DS-018995

Figure 6 shows the evolution of EU imports and exports by SITC group since 2007. The EU has small trade surpluses in all groups except in 'Machinery and vehicles'. Here the deficit was EUR 6.7 billion in 2017 which was much less than the EUR 16.4 billion it had been in 2008. The highest surplus in 2017 was EUR 2.4 billion in 'Food & drink'.

Figure 6: EU-28 imports, exports and trade balance with South Korea by SITC group, 2008-2017 (EUR billion)
Source: Eurostat DS-018995

Most traded goods: cars

Figure 7 gives more detail about the goods exchanged between the EU and South Korea, showing the top 20 traded goods at a more detailed level (by SITC level 3). Those top 20 goods covered just over half of total traded goods in 2017. The top seven products all belonged to the 'Machinery & vehicles' group which had a total of 13 products in the top 20. 'Chemicals' had four products in the top 20. The three remaining products were petroleum oils (both crude and non-crude) and measuring and other instruments. At this product level motor cars and vehicles were both the most imported and most exported product between the EU and South Korea.

Another interesting way to look at data is to investigate the export/import ratio of traded goods, in order to better identify the direction taken by flows and specialisation between the two areas. These ratios can be found in the right-hand margin of Figure 7. For the top product 'motor cars and motor vehicles' the cover ratio of 96 indicates that trade flows are fairly balanced with just a little less exports than imports. For the next product, ships boats and floating structures the ratio of two indicates that only 2 % of imports are covered by exports. Examples of the opposite are other machinery, medicaments and crude petroleum oils whose very high ratios signify that exports to South Korea are much higher than imports from South Korea.

Figure 7: Most traded goods with South Korea, top 20 of SITC level 3 products, 2017 (EUR billion)
Source: Eurostat DS-018995

Germany and the United Kingdom trade most with South Korea

Figure 8a shows Member States' imports of goods from South Korea and the share of the partner South Korea in national extra-EU imports of goods in 2017. Table 8b provides similar information but concerning Member States' exports of goods to South Korea.

There were three Member States whose imports of goods from South Korea were higher than EUR 4 billion: Germany (9.6 billion), the United Kingdom (EUR 4.8 billion) and the Netherlands (EUR 4.7 billion). South Korea is an important partner for Slovakia (22 % of extra-EU imports of goods), Cyprus (17 %), Greece (13 %) and Slovenia (11 %). The share is below 10 % for the other Member States.

Figure 8a: Imports of goods from South Korea by Member State, 2017
Source: Eurostat DS-018995

Germany (18.0 billion), the United Kingdom (EUR 6.7 billion) and the Netherlands (EUR 5.7 billion) are also the largest exporters of goods to South Korea, while France (EUR 5.0 billion and Italy (EUR 4.3 billion) also had exports of more than EUR 4 billion. Only Malta (4.3 %), the Netherlands (4.0 %), Germany (3.4 %), Finland and the United Kingdom (both 3.3 %) have more than 3 % of their extra-EU exports of goods destined for South Korea.

Figure 8b: Exports of goods to South Korea by Member State, 2017
Source: Eurostat DS-018995

Figure 8c shows that 13 Member States had a trade in goods surplus with South Korea in 2017, ranging from just EUR 6 million for Malta to EUR 8.4 billion for Germany. France (EUR 2.5 billion), the United Kingdom (EUR 1.9 billion) and the Netherlands (EUR 1.0 billion) were the only other countries whose trade surplus was larger than EUR 1 billion. The remaining 15 Member States had a trade in goods deficit, starting at EUR 72 million for Bulgaria to EUR 3.2 billion for Slovakia. Greece (EUR 3.0 billion), the Czech Republic (EUR 2.1 billion), Poland (EUR 2.0 billion) and Spain (EUR 1.5 billion) were the only other countries whose trade deficit with South Korea was larger than EUR 1 billion.

Figure 8c: Trade in goods balance with South Korea by Member State, 2017 (EUR million)
Source: Eurostat DS-018995

Source data for tables and graphs

Data sources

EU data is taken from Eurostat's COMEXT database. COMEXT is the reference database for international trade in goods. It provides access not only to both recent and historical data from the EU Member States but also to statistics

of a significant number of third countries. International trade aggregated and detailed statistics disseminated via the Eurostat website are compiled from COMEXT data according to a monthly process.

Data are collected by the competent national authorities of the Member States and compiled according to a harmonised methodology established by EU regulations before transmission to Eurostat. For extra-EU trade, the statistical information is mainly provided by the traders

on the basis of customs declarations.

EU data are compiled according to Community guidelines and may, therefore, differ from national data published by the Member States. Statistics on extra-EU trade are calculated as the sum of trade of each of the 28 EU Member States with countries outside the EU. In other

words, the EU is considered as a single trading entity and trade flows are measured into and out of the area, but not within it.

Data for the other major traders are taken from the Comtrade database of the United Nations. Data availability differs among countries, therefore Figure 1 shows the latest common available year for all the main traders. For the calculation of shares the world trade is defined as

the sum of EU trade with non-EU countries (source: Eurostat) plus the international trade of non-EU countries (source: IMF Dots database).

Methodology

According to the EU concepts and definitions, extra-EU trade statistics (trade between EU Member States and non-EU countries) do not record exchanges involving goods in transit, placed in a customs warehouse or given temporary admission (for trade fairs, temporary

exhibitions, tests, etc.). This is known as ‘special trade’. The partner is the country of final destination of the goods for exports and the country of origin for imports.

Product classification

Information on commodities exported and imported is presented according to the Standard international trade classification (SITC). A full description is available from Eurostat’s classification server

RAMON.

Unit of measure

Trade values are expressed in millions or billions (109) of euros. They correspond to the statistical value, i.e. to the amount which would be invoiced in the event of sale or purchase at the national border of the reporting country. It is called a FOBvalue (free on board) for exports and a CIF value (cost, insurance, freight) for imports.

Context

Trade is an important indicator of Europe’s prosperity and place in the world. The bloc is deeply integrated into global markets both for the products it sources and the exports it sells. The EU trade policy is an important element of the external dimension of the ‘Europe 2020

strategy for smart, sustainable and inclusive growth’ and is one of the main pillars of the EU’s relations with the rest of the world.

Because the 28 EU Member States share a single market and a single external border, they also have a single trade policy. EU Member States speak and negotiate collectively, both in the World Trade Organization, where the rules of

international trade are agreed and enforced, and with individual trading partners. This common policy enables them to speak with one voice in trade negotiations, maximising their impact in such negotiations. This is even more important in a globalised world in which

economies tend to cluster together in regional groups.

The openness of the EU’s trade regime has meant that the EU is the biggest player on the global trading scene and remains a good region to do business with. Thanks to the ease of modern transport and communications, it is now easier to produce, buy and sell goods

around the world which gives European companies of every size the potential to trade outside Europe.

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International trade in goods - long-term indicators (t_ext_go_lti)
International trade in goods - short-term indicators (t_ext_go_sti)
International trade in goods - aggregated data (ext_go_agg)
International trade in goods - long-term indicators (ext_go_lti)
International trade in goods - short-term indicators (ext_go_sti)
International trade in goods - detailed data (detail)
EU trade since 1988 by SITC (DS-018995)