SEOUL, KOREA - This year, the rate of growth in trade has slowed internationally due to a worldwide economic slump. A decrease in the rate of world export growth in 2012 became sharper as international trade began to diminish beginning in the second half of 2012.
“Despite the worldwide slowdown in international trade, Korea has performed relatively well in terms of trade,” said Woon-ho Lee, Director General for Trade Policy of the Ministry of Knowledge Economy(MKE). "Korea’s exports from January to October decreased by 1.3% compared to last year. In October, the first month of the fourth quarter, Korea’s exports grew by 1.1% to USD 47.1 billion, the first increase in four months. Korea’s trade in November is expected to maintain slight growth from a year before. An increase in China’s exports is expected to have a positive impact on Korea’s trade . In addition, the Korea-US and Korea-EU FTAs are supporting Korea’s trades with the U.S. and the EU.”
However, Korea’s overall trade and balance of international trade in 2012 are projected to fall slightly from a year before in spite of the up-turn in the fourth quarter. This year, Corporate Korea will be able to record USD1trillion in trade again, but the day this figure will be reached is projected to be after December 5th.
Korea celebrates Trade Day every year to promote its trade. The government’s prizes for Trade Day aim to encourage workers and companies who put forth a lot of efforts for the development of Korea’s trade throughout the course of the year. “Various assessment factors are used to select the winners of the prizes,” Lee said. “Key factors include amounts of exports , export growth rate, portions of new markets, etc.. This year, the government will give more points to high-potential enterprises and place more weight to export growth for the purpose of promoting exports by high-potential enterprises.”
Changes in social and economic paradigms have displayed direct and indirect impacts on trade structures, Lee emphasized. “People around the world are paying more attention to an increase in environmental regulations aimed to reduce greenhouse gas emissions and build low-carbon economic systems focused on new and renewable energy sources. Worldwide demand for green products and energy plants is expected to expand. At the same time, environmental requirements for traded products are projected to become much stricter,” Lee continued.
The government is making endeavors in order to take advantage of opportunities from climate change and promote the globalization of small and mid-sized companies, Lee said. “We will help Korean companies strengthen marketing power within promising new industries such as green projects combating climate change,” Lee added. “Therefore, the government will invite buyers from 300 companies to business meetings for their green projects and promote activities to help Korean companies seize more opportunities for green projects In the long term, the government will go ahead with nurturing green energy companies on new and renewable energy, and smart grids and will lay the foundation for Korean companies’ growth.”
These days, an improved international image of Korea has been created by Korean cultural contents such as the hit song, “Gangnam Style" and the movie, “Pieta.” “This image can directly and indirectly contribute to creating a better trade environment to Corporate Korea,” Lee said. “Above all, the enhanced recognition of Korean culture will help increase Korea’s exports of cultural contents. Korea’s balance of payments in the personal, cultural and recreational service sector from the first quarter through the third quarter of this year recorded its first black-ink balance -- a surplus of USD 37.3 million compared to last year’s red-ink figure of USD 220 million. Furthermore, we expect that the worldwide popularization of Korean culture will help Korean companies make a foray into overseas markets through the creation of a Korea premium. Until a few years ago, Korean products were underpriced because of so-called Korea discount. This is a dramatic change.”
The Korean government is pushing forward with various support measures to turn the globalization of Korean culture into a new engine for Korean companies’ global marketing and development within overseas markets. “We will help leading Korean companies develop their own brands and carry out brand marketing activities," Lee said. “The Korean government will develop a joint brand for small and medium-sized Korean companies and help them develop overseas markets.”
According to Lee, Korea needs to address problems of its export structure gradually to reach USD 2 trillion. This is because Korea’s export structure has some problems, such as a preponderance of the manufacturing industry, over dependence on price competitiveness, a few large companies and imported materials and parts. “Korean companies ought to create future export growth engines such as agricultural products, new convergence products such as bio and health-enhancing products, nano technology-based products, as well as robots and green energy,” Lee emphasized. “As such, we will help small and mid-sized Korean companies increase exports and develop inroads into overseas markets, elevate the competiveness of its parts and material industries, advance its key industries such as shipbuilding, IT and automobiles, better manage strategic overseas markets such as the construction of nuclear power plants in the UAE, and upgrade its export infrastructure.”
