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- Ministry hosts emergency meeting for export policy check-up after impeachment vote
Led by the Trade-Industry-Energy MinisterJoo Hyunghwan, the Ministry hosted an urgent meeting to inspect current export environment and to predict the outlook for exports next year on Dec 13 in Seoul with key exporters and export promotion-related organizations like KOTRA and Korea Trade Insurance Corp. in its efforts to minimize the impact from the parliament’s impeachment vote against the President last Friday.
In an opening remark, Minister Joo underscored growing uncertainties for exports in and out of Korea. Korean exports have faced external challenges including the protracted global economic slowdown, the president-elect of the U.S. against free trade and growing protectionism around the world.
On the domestic front, economic indicators including industrial output, consumption and investment point to increasing downside risk. With political uncertainty likely to increase next year, consumption and investment are expected to shrink, which will likely pose a threat to the Korean economy.
Despite all of these adverse conditions, exports remain on a solid path to recovery, representing a ray of hope for the economy, the Minister stressed.
In January this year, exports plunged as much as 20% but returned to positive territory in November. It is particularly encouraging that exports not only grew in quantity but also improved in quality:
- From January to October, 4,843 companies that previously had focused only on the domestic market became exporters and as a result, the ratio of exports by small and medium-sized enterprises rose by 1.8% from 35.9% to 37.7%. According to the October data, the exports of five major consumer goods expanded 12.4% year-on-year to USD 17.8 billion, emerging as new key export items.
- In the same period, exports to Vietnam increased 13% as the Korea-Vietnam FTA came into force and aggressive market-development efforts began to bear fruit. Recently, shipments to ASEAN and the Middle East have also been on the rise.
However, the Ministry should not be complacent regarding what it has achieved so far. Below is the Ministry’s policy direction to extend the momentum and accelerate the recovery in exports.
- Exports via e-commerce almost doubled from the previous year and amounted to 1.5 trillion won in the months until September. E-commerce has now become a reliable export platform for SMEs.
- Firstly, the government will immediately launch the export and investment monitoring task force and keep a close watch on exports, imports and foreign investments on a real time basis. In addition, a government-level response team will be set up and a network of cooperation among related organizations will be created in order to address and resolve difficulties facing exporters as quickly as possible.
- Secondly, innovation will pick up speed in all aspects of exports including exporters, export items, markets and methods, with the aim of driving the recovery of exports.
- Thirdly, the government will do its utmost to respond to key trade issues. Specifically, outreach programs run by the government and private sector will be further strengthened, and greater efforts will be exerted to create friendly and favorable trade circumstances.
In response to growing protectionism following the launch of the new U.S. government in January next year, the Korea-US trade council will play a lead role in taking proactive steps to mitigate any negative impact.
The Ministry will renew our long-standing friendship with the U.S. by emphasizing the positive, reciprocal effects that the Korea-US FTA can create and explore various ways of strengthening bilateral cooperation including a USD one trillion infrastructure project.
Recently, there is growing concern over trade and investment between Korea and China. Against this backdrop, the government will focus on solidifying bilateral economic ties while sparing no effort in raising and discussing with the Chinese government issues facing Korean companies that export to China, through both bilateral and multilateral channels of cooperation.
Amid growing uncertainty following 'Brexit', the government will also make sure that ties with the EU remain solid. The Korea-UK Ministerial Joint Commission on Economy and Trade and the Korea-EU FTA Trade Commission will be held this week to deal with repercussions from Brexit as discussions on follow-up measures progress and to discuss how the Korea-EU FTA will be upgraded.
The Minister called for major companies not to be be obsessed with a negative outlook and instead add to the momentum that is required to expedite exports and economic recovery, asking them to make thorough business plans for next year and push ahead with investment, job creation and restructuring in industries suffering from oversupply as originally planned.
*Summary of the Minister's speech