Reviving Korean exports

President Park Geun-hye chaired a trade promotion meeting - the eighth in her government - amid slowing exports and further external uncertainties due to the Greek debt crisis and instability in China. The government announced various measures, including plans to put 116 trillion won ($102 billion) toward boosting exports and promoting construction investment, mergers and acquisitions, venture startups and the tourism industry.

But the industry was unimpressed by the repeated rhetoric. Most of all, the meeting failed to deliver what the industry needed the most - foreign exchange policy against a cheap yen that has taken a toll on Korean exports. The 116 trillion figure has been compiled by companies capital investment plans for this year and next. Policies like the promotion of a Korean center in a Chinese online shopping mall were also included in the April meeting. So complaints from exporters are understandable.

Exports in the first half fell 5 percent from a year ago, and second-half prospects are dim due to the Greek debt crisis and the Chinese economic slowdown. Companies need all the help they can get to compete in overseas markets. But the government has already used up all its policy instruments to support exports. The country can no longer afford to blatantly help exporters.

Although exports have fallen, the country’s losses haven’t been as big as in other countries. Global trade plunged 11.6 percent in the first half. Apart from China, exports from the United States, Germany and Japan all fell much more. Korea also cannot bolster exports through currency interference when the country has been posting record current account surpluses.

What the government can do is improve the corporate environment to help companies hone competitiveness. Better social efficiency through reforms in the labor, finance and public sectors and in education can boost competitiveness in industry and exports. Future trade promotion meetings should invite employers and workers to reflect upon their ideas for more constructive and realistic measures.

JoongAng Ilbo, July 10, Page 30