[VIEWPOINT]Joining an exclusive trade club

South Korea’s trade volume has finally reached the stage of exceeding $500 billion within the foreseeable future. The total amount of Korea’s trade as of October this year was already over $440 billion, and it is expected to surpass $500 billion around the beginning of December.
Only 40 years ago, our trade volume was less than $1 billion and we ranked somewhere around 90th in world trade. Compared to those days, it is almost like the beginning of the world all over again.
Of the 148 member countries of the World Trade Organization, only 11 countries had an annual trade volume of over $500 billion in 2004 ― the G-7 countries, China, the Netherlands, Belgium and Hong Kong.
The fact that most of them, excluding China, are highly advanced trading countries with a national income of over $30,000 makes Korea’s entry into the era of a $500 billion trade volume more meaningful.
It is a well-known fact that exports played a major role in our extravagant trade development. We were around the same level as Senegal or Ethiopia in 1964, when our exports exceeded $100 million, but we expect to achieve over $300 billion in exports next year.
However, we shouldn’t neglect to establish a strategy for the future out of self-satisfaction over the achievement of a $500 billion trading volume. Compared to the major trading countries of the world, we still have a long way to go in terms of technologically competitive brands, the openness of our economy and flexibility. For example, the survey on national competitiveness by the International Institute for Management Development (IMD) last May showed that we ranked 29th out of 60 countries surveyed.
Korea especially received good marks in science and technology, and infrastructure, but the social perspective for an open market economy ranked only 53rd, showing that we have not yet reached a satisfactory level in the field of the corporate social environment.
Therefore, in order to develop our economy past the $500 billion trade volume level to grow into that of over $1 trillion, we need to cast away the frame of the past and make a desperate effort to change our way of thinking and characteristics to fit a bigger trade volume.
First, we have to overcome the export-oriented way of thinking to which we are accustomed and open our import market more so as to be fit to be a major trading country. An open market not only improves the quality of life of the people but also has many other positive effects, such as enhancing the competitiveness of domestic industry through a more effective distribution of resources. Moreover, it is hard to imagine that we would be the only one to keep our doors locked in the face of a worldwide trend toward free trade.
Second, we need to change the paradigm of thinking and not limit trade to existing products, but expand it to services. In other words, we need to pursue a combined trade that includes both goods and services. A strategy that depends solely on goods that we have been trading with so far can only limit development, considering the sudden changes in the domestic and international trade environment such as the rise of China and the internationalization of corporations.
Third, we need to expand free trade agreements with major countries like the United States and China on the basis of a forward-looking way of thinking in order to understand the world trade environment, instead of getting caught up in small issues.
In this age where more than half of the world’s trade is carried out among countries that have signed free trade agreements, signing accords with major countries is essential for the expansion of trade. We not only need to sign agreements with Japan, the ASEAN countries and Canada, with whom we are negotiating now, but we also need to strengthen efforts to make agreements with major economies like the United States, China and India. I hope that the APEC summit meeting to be held in Busan tomorrow will be a good opportunity to speed up such agreements.
We have finally made our way to the $500 billion level that seemed to be far away, and now we are qualified to have the hope of reaching a $1 trillion trade volume level.
I am sure that our dream will come true soon if we arm ourselves with a new way of thinking befitting a major trading country and make efforts to expand our trade diligently.

* The writer is the president of the Trade Research Institute at the Korea International Trade Association. Translation by the JoongAng Daily staff.

by Hyun Oh-seok