Trade can’t be abandoned
The ambience at COEX on Saturday to celebrate the 52nd anniversary of Korea’s Trade Day was far from bright. It was determinedly gloomy. Despite the deliberate packaging of the event - hosted by the Korea International Trade Association and sponsored by the Ministry of Trade, Industry and Energy in a posh district of southern Seoul - as a moment to celebrate Korea becoming the sixth-largest trader in the world, the event actually ended up underscoring the shakiness of our status. The number of companies that exported more than $100 million in goods or services plummeted to 59 from 95, a 38 percent drop. That’s a sad return to the level of 2009, which was shortly after the global financial meltdown. Our exports have dwindled for 11 consecutive months this year. The days of our economy thriving on exports could be over.
The government designated Nov. 30, 1964 - when Korea’s total exports surpassed $100 million for the first time - Export Day. After Korea’s total trade volume exceeded the $1 trillion level on Dec. 5, 2011, the ninth country to achieve that milestone, the government changed Export Day to Trade Day. The date also changed to Dec. 5. What about this year? At its current pace, Korea could hardly achieve its original goal of $1 trillion, as it registered only $886 billion until November this year. Its proud record of achieving over $1 trillion for four years in a row will most likely be broken.
Prospects for next year are not bright. China, Korea’s largest trading partner, has trouble revitalizing its newfound economic prowess, while the United States is poised to raise its benchmark lending rates as early as next week. That bodes ill for the future of our export-driven economy. The so-called sandwich effect - referring to Korea being squeezed between China’s price competitiveness and Japan’s technological edge - is coming true in the worst possible way.
We cannot simply sit on our hands and complain. While making relentless efforts to diversify our export markets, Korea must reinforce the competitiveness of our mainstream industries and find new growth engines. But our exporters can’t enhance their competitiveness overnight. To do that, we need a drastic qualitative change in our economic system along with a strong determination to push ahead with massive reforms on the national level. The government must quickly wrap up its long-touted four reforms across the board, including in the labor market and financial sectors. We hope all parties involved celebrate the 53rd anniversary of Trade Day with a big smile next year.
JoongAng Ilbo, Dec. 8, Page 34