Ministry of Trade, Industry and Energy

5th Regional Comprehensive Economic Partnership (RCEP) Negotiations Completed

This round of negotiations was participated in by a total of 600 delegation members from 16 member countries. The Korean delegation, headed by Director-General for FTA Negotiations of the Ministry of Trade, Industry & Energy Kim Young-moo, included officials from the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs and the Ministry of Oceans and Fisheries. ※ 10 ASEAN countries + 6 AFPs (ASEAN FTA Partners, : Korea, China, Japan, Australia, New Zealand and India) During this 5th round of negotiations, discussions were held on Trade in Goods, Services, Investment, Competition, Intellectual Property Rights, Economic Cooperation and the Legal/Institutional Issues, with the aim of achieving visible outcomes for the 2nd RCEP Ministerial meeting to be held in Myanmar in August 2014. Discussions were also held on whether SMEs(Small and Medium Enterprises) , e-commerce, global value chain and government procurement will be included in the scope of negotiations. The Korean delegation actively involved in negotiations by releasing a paper on the Key elements to be explored in the Dispute Settlement Chapter, and submitting the joint non-paper on Government Procurement and SMEs with New Zealand as well. The next round of negotiations (the 6th round of RCEP negotiations) will be held in India in December 2014. date2014-07-02

Export and Import Trends for June and 1st Half of 2014

By contrast, exports to China declined due to China’s increased self-sufficiency in petrochemicals and oil products. Exports to Latin America were also weak, due to a sharp decline in the export of ships. In addition to a slight increase in imports of raw materials and capital goods, there was a significant growth in imports of commodities, due mainly to a growth in automotive imports. Despite the unfavorable conditions, Korea recorded historic-high exports in the first half, mostly attributable to the robust performance of SMEs. It is expected that Korea’s exports will continue to grow, especially in the ship and automotive sectors, as global trade volumes increase thanks to the recovery of advanced economies including the US and EU. Risk factors do exist, including uncertainty over the recovery of Chinese exports, which significantly affects the exports of Korea, also the strong Won and the situation in Iraq. Consequently the government will increase monitoring. Deputy Director Song Jeong-hun, Export and Import Division (044-203-4042) date2014-07-02

Nano Korea 2014 Will Showcase the Locomotives of the Creative Economy

The International Nanotech Symposium will include themed lectures addressing characteristics and trends in nanotechnology, with the slogan “Nanotechnology: Locomotive of the Creative Economy”. In addition, diverse programs will be running for students and female scientists. A discussion of career paths in the nanotech industry, as well as accessible lectures and experiments, will take place in order to give young adults more exposure to nanotechnology. “Women in Nano” is a cooperative session organized by the Association of Korean Women Scientists and Engineers, It is designed to encourage participation by female scientists in Nano Korea 2014. Director Man-ki Jeong said, “I believe this event will provide practical assistance to nano businesses. The government will concentrate policy initiatives to achieve fully-fledged commercialization of nanotechnology and technology convergence.” First Deputy Minister Sang-mok Lee said, “I will be actively supporting Nano Korea 2014 in cooperation with the Ministry of Trade, Industry and Energy, in order to move valuable research achievements towards commercialization, and boost nanotech foundations and exchange.” Deputy Director Song Jeong-hun, Export and Import Division (044-203-4042) date2014-07-02

Meeting with Ecuadorean Foreign Relations Minister

Meeting with Ecuadorean Foreign Relations Minister Second Vice Minister Han Jin-hyun of the Ministry of Trade, Industry & Energy met with Ecuadorean Foreign Relations Minister Ricardo Patiño, who visited Korea to attend the 2014 High-Level Forum on Korea-Latin American Partnership in the meeting room of the Ministry of Foreign Affairs Building in Gwanghwamun, Seoul at 14:00, July 1 (Tuesday), 2014. Two leaders exchanged views about the trade agreement between the two countries, orders date2014-07-01

Sales Trends of Major Retailers for May 2014

Sales of supermarkets grew by 1.2% year-on-year and 18.8% month-on-month. Supermarkets recorded growth in sales for the first time in four months due to the fact that there were more holidays compared to the same period in the previous year, and an uptick in demand for food and home appliances due to the World Cup. Non-food sales grew significantly due to promotion events in May, the Month of Family, contributing to the significant sales growth month-on-month. The sales growth rates of supermarkets by category are as follows: Non-Food ○ Home Appliances & Culture - Year-on-Year : 13.4 - Month-on-Month : 32.8 ○ Apparel - Year-on-Year : -8.6 - Month-on-Month : 24.2 ○ Home Supplies - Year-on-Year : -1.1 - Month-on-Month : 18.5 ○ Sports - Year-on-Year : -1.3 - Month-on-Month : 27.6 ○ General Merchandise - Year-on-Year : -6.6 - Month-on-Month : 27.5 ○ Subtotal - Year-on-Year : 0.5 - Month-on-Month : 24.8   ○ Foods - Year-on-Year : 2.3 - Month-on-Month : 12.6 ○ Total - Year-on-Year : 1.2 - Month-on-Month : 18.8       Sales of department stores grew by 0.8% year-on-year and by 8.0% month-on-month. Sales grew slightly compared to May 2013, which was attributable to the earlier off-season events than the previous year and the sales growth in cooling systems for the summer and in TVs for the World Cup. Sales in all categories grew month-on-month, thanks to the added demand related to the Month of Family, more holidays, more operating days during holidays and better consumer sentiment. The sales growth rates of department stores by category are as follows: Non-Food ○ General Merchandise - Year-on-Year : -1.9 - Month-on-Month : 17.0 ○ Women’s Formal Dress - Year-on-Year : 0.8 - Month-on-Month : 1.9 ○ Women’s Casual - Year-on-Year : -2.5 - Month-on-Month : 8.1 ○ Women’s Apparel - Year-on-Year : -3.8 - Month-on-Month : 8.2 ○ Kids & Sports - Year-on-Year : -2.3 - Month-on-Month : 3.8 ○ Home Supplies - Year-on-Year : 9.6 - Month-on-Month : 1.4 ○ Foreign Premium Brands - Year-on-Year : 7.5 - Month-on-Month : 5.0 ○ Subtotal - Year-on-Year : -0.3 - Month-on-Month : 7.5   ○ Foods - Year-on-Year : 4.6 - Month-on-Month : 10.0 ○ Total - Year-on-Year : 0.8 - Month-on-Month : 8.0         Sales of convenience stores grew by 6.9% year-on-year, and by 9.5% month-on-month. Sales grew year-on-year due to the higher number of stores operated and the growth in customers going on picnics due to there being more holidays. The month-on-month sales growth was attributed to the sales growth in foods, including beverages and beer. The sales growth rates of convenience stores by category are as follows: Non-Food ○ Daily Commodities - Year-on-Year : 4.5 - Month-on-Month : 6.2 ○ General Merchandise* - Year-on-Year : -4.9 - Month-on-Month : 18.9 ○ Tobacco & Other goods - Year-on-Year : 3.9 - Month-on-Month : 5.8 ○ Subtotal - Year-on-Year : 3.2 - Month-on-Month : 6.8   Foods ○ Beverages & Processed Goods - Year-on-Year : 10.9 - Month-on-Month : 13.2 ○ Instant Foods (Specific Perishable Goods) - Year-on-Year : 2.8 - Month-on-Month : 0.7 ○ Subtotal - Year-on-Year : 9.9 - Month-on-Month : 11.6   ○ Total - Year-on-Year : 6.9 - Month-on-Month : 9.5 * Books, magazines, lottery tickets and gift certificates       The sales of SSMs declined by 0.2% year-on-year, but grew by 7.2% month-on-month. The year-on-year sales decline due to obligatory off-days on weekends and the growing number of stores with date2014-06-26

In the FTA era, the world is gathering to discuss trade remedies

Trade Survey Department Director of the Korea Trade Commission Park Jin-kyu gave a presentation introducing the function, role, and survey status of the Korea Trade Commission. He emphasized the fact that the FTAs signed by Korea have reflected more reinforced trade remedy provisions*(WTO Plus), in comparison with WTO agreements, for the purpose of establishing a fair and transparent trade remedy system, and accumulating and sharing best practices will greatly contribute to the global improvement of the relevant system. In the evening, the Commission held a Business Dialogue event in which local exporting companies could meet the representatives of overseas tr date2014-06-20

South Korea to Step Up Efforts to Attract More Global HQs and R&D centers

The revision is a follow-up measure to「Foreign Investment Promotion Measures」 announced in the meeting among foreign investment companies held by President Park Geun-hye on Jan 9, 2014. The purpose of the promotion drive is to attract global company HQs and R&D centers that can increase the growth potential of our economy and create good jobs by cultivating high-quality talents, advanced business management techniques and technology acquisition. To this end, specific incentive support plans have been announced, including an income tax cut, a simplified taxation process, and a convenient entry and departure process. * The same income tax rate applicable to foreign directors and employees (currently, 17%), an income tax cut for foreign researchers (50%), expansion of the exception list for tax data submission upon service contract, 5-year increase of foreign investor visa stay * In November 2012, Japan enacted the 「Asia Base Promotion Act」, and as a result, major companies have come up with various incentive systems and actively attracted foreign money. To be certified as a global company HQ or R&D under the revised Act, the following conditions must be met. * (Global company HQ) must be for a foreign investment company acknowledged as such by Foreign Investment Committee considering revenues (no less than KRW 3 trillion) or industry representativeness. * It must provide support and coordination to no less than two foreign companies. * The number of personnel working at the HQ should be no less than 10 and the ratio of foreign investments shall be no less than 50%. * (R&D Center) It must retain no less than 5 researchers whose qualifications include a master’s degree, or no less than 3 years of professional research. * No less than KRW 100 mil must be invested in the newly expanded R&D facility, and the foreign investment ratio shall be no less than 30%. date2014-06-17

May Car Industry Trend

* Comparison of business days: (May 2013) 21 days → (May 2014) 19 days (two days less) Some plants voluntarily closed on May 2 (Fri): Kia’s Hwaseong Plant, GM’s Gunsan Plant and Renault’s Busan Plant * Exports by GM Korea to EU (From Jan to Apr 2013 → From Jan to Apr 2014): 19,017 units→11,658 units (down 38.3%) Exports by GM Korea to Eastern Europe (From Jan to Apr 2013 → From Jan to Apr 2014): 23,405 units →22,203 units (down 5.1%) ○ 2014 May - Production : 373,470 - Domestic Sales : 137,396 - Domestic Cars : 122,082 - Imported Cars : 15,314 - Export : 255,187 - (Amount) : 41.4 ○ Month-on-Month - Production : -13.9 - Domestic Sales : -7.0 - Domestic Cars : -6.8 - Imported Cars : -8.4 - Export : -14.9 - (Amount) : -12.6 ○ Year-on-Year - Production : -3.0 - Domestic Sales : 3.0 - Domestic Cars : 1.7 - Imported Cars : 14.2 - Export : -5.1 - (Amount) : -0.5     ○ 2014 Jan to May - Production : 1,962,122 - Domestic Sales : 667,199 - Domestic Cars : 590,739 - Imported Cars : 76,460 - Export : 1,342,638 - (Amount) : 214.7 ○ Year- on -Year - Production : 4.1 - Domestic Sales : 6.8 - Domestic Cars : 4.9 - Imported Cars : 23.9 - Export : 2.4 - (Amount) : 6.5       Despite the weak consumer demand and less business days, the domestic sales recorded growth for five consecutive months with year-on-year growth of 3.0% thanks to the effect of the launch of new cars and growing demand for RVs. Meanwhile, the export volume of the automotive sector for May was recorded at 255,187 units, a year-on-year decline of 5.1%, due to the decline in exports by GM Korea to EU and Eastern Europe. date2014-06-13

Korea’s ICT Exports Reach USD 14 Billion in May

- Export: USD 14 billion (-7.5%), Import: USD 6.75 billion (-1.8%), Trade Balance: Surplus of USD 7.25 billion ICT exports for May 2014 reached USD 14 billion, a year-on-year decrease of 7.5%. Daily average ICT exports* for May were USD 0.651 billion, which was just slightly lower than the USD 0.658 billion reached in the previous year, but the year-on-year decrease** was attributable to there being less business days. * Based on the number of business days for May 2014: 21.5 ** Number of business days for May 2013: 23 (6 public holidays and 4 Saturdays) Number of business days for May 2014: Between 20.5 and 21.5 (7 public holidays and 5 Saturdays, voluntary business operation on May 2 (Fri)) By nation, exports to major trading partners including China (including Hong Kong) and the US were weak, while exports to EU and Taiwan grew thanks to robust exports of parts, including semiconductors. * Exports by region: China (Hong Kong) was USD 7.04 billion, -6.3%, US was USD 1.57 billion, -10.6%, EU was USD 0.96 billion, 8.3%↑, and Taiwan was USD 0.53 billion, up 27.7% ICT exports from January to May were recorded as USD 69.9 billion, continuing the historichigh accumulated exports in 2014. * Yearly ICT exports from January to May: 2012 was USD 60.34 billion → 2013 was USD 67.96 billion → 2014 is USD 69.9 billion The ICT industry recorded a surplus of USD 7.25 billion in May 2014, contributing to the national trade surplus of USD 5.35 billion. Imports of PCs and peripherals (USD 0.71 billion, up 2.8%), mobile phones (USD 0.58 billion, up 155.9%) and display panels (USD 0.5 billion, up 2.6%) grew, while imports of semiconductor (USD 2.64 billion, down 14.9%) and D-TV (USD 0.03 billion, down 6.0%) declined. By region, imports from advanced economies including the US (USD 0.55 billion, down 11.3%) and EU (USD 0.5 billion, down 1.7%) declined, while imports from emerging regions including China (including Hong Kong, USD 2.5 billion, up 6.0%) and Latin America (USD 0.05 billion, up 9.8%) grew. date2014-06-11

Korea and China Exchanged 2nd Offer of Goods and Made Progress in Regulations

The 11th round of Korea-China FTA negotiations was held in China (Meishan, Sichuan) for five days from May 26 to May 30, 2014. The Korean delegation was led by Woo Tae-hee, Assistant Minister for Trade & Chief Negotiator for FTAs of the Ministry of Trade, Industry and Energy, while the Chinese delegation was led by Wang Shouwen, Assistant Minister of Commerce. During this negotiation, the two parties discussed all of the areas to be covered by the FTA, including offers of goods, services and investments and regulations and cooperation. The two parties exchanged a 2nd offer which was improved from the 1st offer exchanged in December 2013 for the category of goods, and also exchanged the 2nd request for items of key interest to each party. The two parties made meaningful progress in terms of agreement on text of trade in goods, trade remedy, regulations and areas of cooperation. As well, the parties engaged in in-depth discussions on the approach to opening the services and investment sectors, and significantly, exchanged requests and opinions about areas of mutual interest in relation to the services sector for the first time. The negotiations also saw significant progress in areas such as rules of origin, customs procedures and environment, and it was agreed that efforts to reach an agreement on the remaining issues would be accelerated. The two parties also engaged in in-depth discussions on ways to reinforce bilateral cooperation in industry, agriculture, fishery, forestry and government procurement. The 12th round of negotiations will be held in Korea in July, at a date and location to be determined. date2014-06-09