SEOUL, Nov. 26 (Korea Bizwire) — South Korea’s trade deficit with Japan edged up in the first 10 months of the year, data showed Thursday, as a local boycott of Japanese consumer goods shows signs of losing steam.
Seoul posted a trade deficit of US$16.56 billion in the January-October period, compared with $16.42 billion during the same period a year earlier, according to the data from the Korea International Trade Association (KITA).
Exports to the neighboring country fell 13 percent on-year to $20.63 billion over the cited period, with imports dropping 7.3 percent to $37.19 billion.
The upturn in the trade deficit represents a sharp turnaround from last year’s red ink.
In the wake of the boycott, South Korea’s trade deficit with Japan came to $19.16 billion, the lowest red ink since 2003. Seoul’s trade deficit with Tokyo had ranged from $20 billion to $30 billion since 2004.
In July last year, South Koreans launched the boycott in protest of Japan’s export restrictions of some key industrial materials to South Korea.
Tokyo made the move as the top court in South Korea ordered Japanese firms to compensate Korean victims of Japan’s wartime forced labor in 2018.
The downturn in the trade deficit continued till the first half of this year, but South Korea’s trade gap began to widen as exports fell faster than imports.
South Korea’s exports to Japan swung to a 3 percent decline in April from a 0.1 percent gain in March, with the decreasing rate expanding to 13 percent last month.
Imports from Japan tumbled 21.9 percent on-year in January, but the rate narrowed to 7.3 percent in October.
Imports of Japanese consumer goods is also showing signs of a gradual recovery. Japan’s auto exports to South Korea soared 90 percent on-year in October, according to Japanese government data.
Market watchers said South Korea’s trade with Japan would increase more after a mega trade deal involving Asia-Pacific countries comes into effect next year.
Early this month, the Association of Southeast Asian Nations (ASEAN) members and its dialogue partners — South Korea, China, Japan, Australia and New Zealand — effectively reached the agreement, known as the Regional Comprehensive Economic Partnership (RCEP).