South Korea needs to take active steps to reduce its chronic service sector deficit that is hurting the country's global competitiveness, a local trade association said Wednesday.

   In a report on the local service industry, the Korea International Trade Association (KITA) said that with the exception of 1998, the country has consistently been in the red in this field since 1990.

   In 2009, the country's service sector deficit reached US$6.64 billion, up sharply from $5.73 billion a year earlier, it said. The service sector covers business-related consulting, intellectual property right transactions, travel and educational outlays, and transportation.

   Out of the 33 countries in the Organization for Economic Cooperation and Development (OECD), South Korea was one of 10 countries that reported a service sector deficit in the cited year.

   The United States had the largest surplus of $128.69 billion with Britain and Switzerland making up the top three. South Korea ranked 27th on the list, with Japan coming in at 32nd place with a service sector deficit topping $20.44 billion.

   KITA said that while South Korea's transportation-related surplus amounted to $5.2 billion in 2009, it reported deficits in other key areas.

   To overcome its perennial deficit, South Korea needs step up efforts to attract overseas experts, seek to merge or acquire foreign service business companies and push for strategic alliances.

   The country should also develop new attractions, like its popular Korean popular music and its high-quality medical services, and invest more in research and development so the country can cut back on paying technology royalties, it said.

Source: Yonhap News (July 20, 2011)