In the Second Half of Last Year, Intellectual Property Trade Balance Surpasses $80 Million... First Ever Surplus

[Asia Economy Reporter Kim Eun-byeol] Last year, South Korea's intellectual property trade deficit amounted to $800 million, maintaining a deficit level below $1 billion. On a half-year basis, the country recorded an $80 million surplus in the second half of last year, marking the first-ever surplus.

According to the "2019 Mid-Year Intellectual Property Trade Balance (Provisional)" released by the Bank of Korea on the 24th, South Korea's intellectual property trade balance last year showed a deficit of $800 million. The deficit increased compared to 2018 (-$610 million). The 2018 intellectual property deficit was the smallest since the Bank of Korea began compiling related statistics in 2010. Although the deficit widened slightly compared to 2018, it is still on a decreasing trend.

A Bank of Korea official explained, "Exports of domestic game companies' franchise rights and computer programs decreased, while imports of patents, utility model rights, and computer programs from foreign-invested small and medium-sized enterprises increased, expanding the deficit compared to the previous year." He added, "However, the deficit itself has significantly decreased compared to the past."

Industrial property rights showed a deficit of $2.14 billion, mainly due to patents and utility model rights (-$1.89 billion), whereas copyrights recorded a surplus of $1.62 billion. Among copyrights, research and development and software copyrights achieved a record-high surplus of $1.8 billion, while cultural and artistic copyrights showed a deficit of $180 million. Nonetheless, the deficit in cultural and artistic copyrights was the smallest ever on an annual basis, which was encouraging. A Bank of Korea official stated, "The deficit narrowed as exports of music and video copyrights from domestic entertainment companies increased."

By institution type, foreign-invested large corporations (-$360 million) and foreign-invested small and medium-sized enterprises (-$3.43 billion) mainly showed deficits. In contrast, domestic large corporations and domestic small and medium-sized enterprises recorded surpluses of $870 million and $2.06 billion, respectively. Domestic large corporations turned to a surplus for the first time due to increased exports of music and video copyrights, databases, and decreased imports of claim fees.

By industry, manufacturing showed a deficit of $780 million, while services recorded a surplus of $300 million.

Within manufacturing, electrical and electronic products (-$490 million), chemical products and pharmaceuticals (-$270 million), and other machinery and equipment (-$150 million) showed deficits, but automobiles and trailers recorded a surplus of $920 million, the largest annual surplus. In services, wholesale and retail trade showed a deficit of $390 million, whereas information and communication recorded a surplus of $580 million.

By trading partner, the deficit with the United States decreased from $4.66 billion in the previous year to $3.68 billion. The deficit with Japan was $780 million, and with the United Kingdom, $490 million.

On the other hand, Vietnam and China recorded surpluses of $2.32 billion and $2.01 billion, respectively.

This content was produced with the assistance of AI translation services.