IT/Electronics Exports Riding the $100 bil. Wave! Korea's total amount of trade is certain to break through the US$ 500 billion mark this year. In essence, this remarkable accomplishment means that the nation is on the verge of becoming an advanced economy. The Korea International Trade Association (KITA) said in a recent press conference that the amount of trade exceeded US$ 440 billion as of the end of October this year and the Association anticipated that it would finally hit US$500 billion by early December. If we recall that Korea's exports were no more than US$100 million in late 1964 and imports were also merely US$400 million, KITA chairman & CEO Kim Jaechul, said he believes that the breakthrough of US$500 billion in terms of the amount of trade which Korea accomplished within no more than 40 years, has paved the way widely for Korea to join the ranks of advanced trading nations, both nominally and virtually. The chairman noted that he hoped this achievement would serve as an impetus for Korea to recover confidence in becoming an advanced economy with per capita GDP of $20,000, even though the nation's national income still remains at around $10,000. Need to diversify trade To this end, Kim maintained that Korea needs to pursue a diversified approach to trade, combining products and services to enable Korea's trade to grow continuously. Furthermore, Korea should lead the globalization trend of world trade through conclusion of Free Trade Agreements (FTAs) with major trading partners. The chairman explained that the new trade strategy to graft IT technology on manufacturing industry is essential, pointing out that it is difficult to maintain continuous development with only manufacturing industry or product export alone. As the nation's economic development's paradigm converts from quantity-oriented to quality-oriented, it is above all vital to drive forward national vision and strategy from a new perspective on the occasion of a new era of globalization and knowledge informatization. Kim proposed that Korea should pursue a complex trade running parallel with product and service exports, promoting Korea as a hub nation of Northeast Asia, as part of a new trade strategy. Provided the Korean peninsula is nurtured as a logistics, tourism, and business hub of Northeast Asia by taking advantage of favorable opportunities, including the territory's geopolitical location and national potential, the chairman said he firmly believed that the economy would be revitalized. IT industry's dazzling growth What is noteworthy, is the IT industry's dazzling growth and the fact that the IT industry has been an engine of Korea's economic growth during five recent years (1998~2002). As the IT industry's relative importance to total GDP during this five year period has grown from 9.3% in 1998 to 14.9% in 2002, it has emerged as a core growth engine of the national economy. MIC officials explain that 40% of the substantial GDP increase portion during this period was created by the IT sector. According to the Ministry of Information and Communication (MIC) Korea's IT industry foundation was extremely small, even at the beginning of the 1980s, but thanks to the government's intensive R&D investment, Korea was able to lay a stronger foundation for IT technology self-reliance as the country succeeded in TDX and CDMA mobile communication system development projects one after another. Since the mid-1990s, on the one hand, large-scale informatization projects such as high-speed Internet and e-Government, and on the other hand, communication market competition promotion measures have created sufficient domestic demand that is necessary for the development of the IT industry. The IT industry which began to secure global competitiveness through fierce domestic demand competition, not only helped Korea in recovering quickly from the 1997 financial crisis greatly, but has also created new optimism that Korea will soon be recognized as an advanced economy, according to, MIC officials. To support inroads into overseas markets, MIC has strategically pioneered newly-emerging IT markets such as China, Vietnam and India, with high market enlargement potential in the years to come. On the back of this, the government is supporting efforts to export new technologies and services such as WiBro (Wireless Broadband) service and DMB (Digital Multimedia Broadcasting) services to prove the advanced capabilities of IT Hub Korea, as well as the value of Korea's IT technology as a growth engine of the world economy, with priority given to Europe and South America etc. Essential expansion of FTA agreements Without FTA agreement enlargement, it is difficult to expect export growth. In that respect, KITA officials responsible for external exports contend that Korea also needs to consider in-depth the possibility of FTAs with huge markets such as the United States in order to minimize relative disadvantages according to each nation's FTA agreement enlargement, though efforts toward exchange rate stability will also be important next year. In terms of the quantitative side, this year's FTA promotion was successful, as Korea has now wrapped up an FTA agreement with Singapore, to be followed by EFTA and has negotiations with Japan, ASEAN and Canada under way. However to have a substantial impact on the economy, Korea must promote FTAs with larger economies like the United States in earnest. An FTA with the United States is vital, especially in terms of commerce and national security, chairman Kim of KITA emphasized. In particular, KITA is practicing a 'complex trade strategy,' in which not only product trade, but also competitiveness of production elements such as service trade, technology and human power must be equipped to help our country continue economic growth through trade in the 21st century as well. From such a standpoint, electronic trade also is emerging as an indispensable strategy, no more a selection for the revitalization of the nation's overall trade.