Koreans are the world’s 2nd-most enthusiastic viewers of “Frozen.”

THE NUMBERS: U.S.-Korea services trade growth, 2010-2013*

* No services-trade data by country will be available for 2014 until October.

WHAT THEY MEAN:

Korean public-service broadcaster Arirang claims that Koreans are the world’s greatest animation-lovers:

“South Korea is the biggest market for Frozen outside of the U.S., bringing in over 75 million dollars. … The fact that it broke the 10 million [viewer] mark is incredible.”

Korea is a country of 50 million people, and about 7 million children and teens … so 10 million viewers is a lot. To be a bit technocratic, the multiple-time viewers in Seoul, Gwangju, etc. were likely taking advantage of a feature of the 2011 U.S.-Korea Free Trade Agreement reducing restrictions on theater time for foreign films. Here is an anecdotal window into the question of how much “trade agreements” affect actual flows of trade. In the case of the Korea agreement, statistics can help make it systematic.

The U.S.’ five newest FTAs are (a) those with Oman and Peru, which went into effect in 2009; then (b) those with Colombia, Panama, and Korea, implemented in 2011. For “merchandise” trade – the flows of physical, tangible things like barrels of oil, cars, shirts, metal ores, computers, and roses – American statistical data are precise and up-to-date, covering as of today everything down to the last chunk of bauxite and bunch of roses from 2009 to November 2014. The combined totals are:

Obviously these are bottom-line figures. Changes in trade flows aren’t identical across countries, nor across different types of products. (Since the U.S.-Korea agreement, for example, American shipments of cars, beef, and semiconductor manufacturing equipment have all jumped up; on the other hand, shipments of corn, scrap iron, and semiconductor chips are down.) But in general as the five agreements phase out tariffs, revise customs procedures, reform product-approval rules and so on, real-world shoppers, shippers, and exporters seem to be responding as the governments had hoped they would.

“Merchandise,” however, is the biggest but not the only part of trade. While 9 of the chapters in the U.S. agreements with Colombia, Panama, and Korea deal in various ways with merchandise trade, another 5 cover trade in services. These are movies like the software, cross-border bank-loans and insurance policies, patent and copyright royalty payments, contract research and development, distance education enrollments, and so on. Services account for about a third of American exports and a sixth of imports today, and the rapid spread of Internet access makes services trade likely to grow especially fast in the future.

The response of services sellers and buyers to trade agreements is less easily answered, though anecdotal observations like Arirang’s suggest that (if the seller has an appealing product) the buyers respond. iThe Commerce Department’s Bureau of Economic Analysis publishes a report on U.S. services trade by country every October, meaning services figures for particular countries are more than a year behind merchandise figures. More often they aren’t available at all – services trade data are collected for only 34 of the U.S.’ 234 individual trading partners plus a few larger aggregates, such as “Latin America,” the European Union, and “the world.”

Those interested in Latin American trade get only figures for Mexico, Brazil, Chile, Venezuela, and Argentina. FTA partners Colombia, Panama, and Peru are lumped into a huge ‘Other South and Central America’ category with the Caribbean Islands, Ecuador, Bolivia, Uruguay, Guatemala, etc. etc. The same goes for the Middle East, only more so: the U.S.’ four Arab-world FTA partners (Bahrain, Jordan, Morocco, and Oman) are in an “Other Middle East” group, together with every other country in the region but Israel and Saudi Arabia.

The exception among recent agreements is Korea, one of the 34 countries for which the BEA does publish services data. Here, the figures from 2010 (the year before the agreement went into effect) to 2013 look like pretty good backup for Arirang’s account of the Seoul and Gwangju Frozen viewers:

In actual dollars, U.S. services exports to Korea jumped from $13.2 billion in 2009 and $15.4 billion in 2010 to $16.7 billion in 2011, and $20.9 billion in 2013. Export jumps of 50 percent or more show up in movie revenue, as well as software, telecom services, contract research and development, advertising, computer services, and a few other industries. Korea’s services sales to the United States also grew (though a bit more slowly), from $7.8 billion in 2009 and $9.3 billion in 2010 to $10.7 billion in 2013. Here the main item is transport, where Koreans shipping lines and air carriers earned $5.4 billion in 2013. In percentage terms, though, Korea’s fastest increase came in movie revenue, which though still low in comparison to Hollywood rose from a tiny $5 million in 2010 to $35 million 2013.

Quite good results, but this is of course only one country. It would be nice, and useful as Congress prepares for a Trade Promotion Authority bill meant to set guidelines for future agreements, to have some more.

FURTHER READING:

Arirang on Frozen, with high hopes for Korea’s animation industry: http://www.arirang.co.kr/News/News_View.asp?nseq=158868

The U.S. Trade Representative’s services-trade page: http://www.ustr.gov/trade-topics/services-investment/services

FTAs & Updates –

KORUS FTA, final text as approved by Congress in 2011: http://www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta/final-text

The Embassy of Oman looks back at 190 years of U.S.-Oman trade agreements and diplomatic missions, and at the relationship today: http://www.omani.info/web/oman/

And the Embassy of Panama’s trade and investment page: http://www.embassyofpanama.org/trade-and-invest/

And some services-trade data sources –

The Bureau of Economic Analysis’ new services-trade database: http://www.bea.gov/iTable/index_ita.cfm

The WTO’s most global services-trade statistics report: http://www.wto.org/english/res_e/statis_e/its2014_e/its14_trade_category_e.htm

And World Bank scholar Aaditya Mattoo reviews the state of world services trade barriers http://documents.worldbank.org/curated/en/2012/06/16441100/policy-barriers-international-trade-services-evidence-new-database

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