Crs Report for Congress

Over the past decade, South Korea has emerged as a major economic partner for the United States. Korea is the U.S.‘s seventh-largest trading partner - ahead of Western European countries such as France and Italy - and its sixth-largest export market. Korea has also become a significant investment site for American companies, which have poured nearly $10 billion into the country over the past three years. The U.S. is Korea’s largest export market, second-largest source of imports, and largest supplier of foreign direct investment. Increased economic interaction has been accompanied by disagreements over trade policies. The level of bilateral friction is principally affected by four factors: the size of the U.S. trade deficit with South Korea; the state of the U.S. economy; the progress of Korea’s economic reforms; and whether or not bilateral political or security issues override bilateral trade considerations.