South Korea’s service-sector deficit with the United States stretched to a fresh record high in 2016 on increased spending on overseas travel, studies, and patent fees, central bank data showed on Tuesday.

According to preliminary data released by the Bank of Korea, South Korea posted a service balance deficit of $14.28 billion with the U.S. last year - the largest amount since the central bank began tracking related data in 1998.

Korea’s service deficit with the world’s largest economy has been widening since the free trade agreement between the two economies took effect in 2012. The red figures soared to $14.09 billion in 2015 from $11 billion in 2014.

By sector, Korea’s tourism deficit accounted for the largest $5.73 billion, followed by that of intellectual property right fees that came to $4.59 billion, underscoring that Koreans are mostly disadvantaged in travel, study, and intellectual property rights against Americans.

Korea’s transport balance deficit jumped from $632.5 million in 2015 to $1.45 billion last year mainly due to the sluggish global freight industry and the collapse of country’s once leading Hanjin Shipping Co.

Korea’s current account surplus with the U.S. including both commodities and services shrank by the biggest scope in four years to $31.15 billion last year, down 5.7 percent from $33.03 billion in 2015. The data could be helpful for Seoul as it faces Washington’s possible revisit to FTA citing widening trade deficit.

Korea’s current account surplus with China also fell sharply.

Last year, Korea posted a current account surplus of $40.72 billion win China, down 12.9 percent from $46.73 billion in 2015. The surplus was the smallest amount in five years since $27.43 billion in 2011 as intermediary shipments that make up the bulk of exports to China have been falling due to Beijing’s promotion of domestic industries.

Korea’s goods balance surplus with China came to $3.37 million in 2016, a 6 percent drop from a year ago while service surplus plunged 29 percent to $4.08 billion as Beijing begun sanctioning Korean enterprises and contents amid talk of installing a U.S. military shield in Korea.

Korea’s current account deficit with Japan, meanwhile, continued to expand from $19.08 billion in 2015 to $20.48 billion last year amid increase in the imports of machinery, precision instruments, and data communication equipment.

Korea’s current account deficit with the European Union dropped from $7.47 billion in 2015 to $7 billion last year.

By Boo Jang-won

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