Trade minister unveils ambitious exports plan

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Trade minister unveils ambitious exports plan

Korea’s top trade official proposed an ambitious vision for Korea to become the fourth largest exporting county in the world by 2022.

Kim Hyun-chong, Korea’s trade minister, presented the country’s trade strategy on Thursday through a press briefing in the Sejong government complex, where the minister said Korea hopes to become the fourth largest exporting country in the world by 2022, outpacing Japan by achieving $790 billion in outbound shipments.

Korea was the sixth largest exporter in the world in 2017, shipping out some $573.7 billion worth of goods that year. Japan exported products worth $698.1 billion in the same year, fourth in the world.

“Looking at the data from 2010 to 2017, Japan posted 2.3 percent annual growth in exports on average while Korea reported 5.9 percent,” added an official from the Trade Ministry. “We believe we can bring our number up to 6.6 percent on average [in the next four years] to outpace Japan by 2022.”

“This is our will and vision,” added the trade minister, noting that there may be a number of variables that could change the game.

One of the key elements of the ministry’s plan is to reduce Korea’s dependency on exports to the United States and China, which accounted for 36.7 percent of Korea’s total exports last year.

Kim explained that Korea is currently considering joining the Trans-Pacific Partnership (TPP), which is led by Japan after the United States withdrew last year.

The multinational trade pact is currently undergoing new negotiations as the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Cptpp).”

“We would join the pact at the same time as the United States,” Kim added. “President Trump would re-consider joining the pact if the terms become more favorable for his country.”

The plan revealed on Thursday also included a possible free trade pact with the Eurasian Economic Union, an economic union that includes Russia. The ministry predicts that through a partnership with Eurasian nations, Korea will be able to take advantage of arctic shipping routes.

Still, the ministry’s plan could be an uphill struggle, particularly due to escalating tension in the global trade scene as the United States and China gear up for possible trade warfare.

Hyundai Research Institute, a local economic think tank, said in a report released on Wednesday that if Chinese exports to the United States shrink by 10 percent, Korea’s exports to China will also take a blow, with annual exports plummeting by as much as $28.2 billion.

The Korea International Trade Association (KITA) made similarly gloomy projections as a result of tension between the United States and China. If the two countries strike a deal and China decides to import more semiconductors from the United States, a proposal Beijing reportedly made to Washington recently, Korea’s exports, which rely heavily on computer chips, would decline by $4 billion.

In a worst case scenario where the United States and China go on a full-out trade war, which KITA says is unlikely, Korea would suffer as much as $36.7 billion in export losses.

“We think there will be a number of variables to be factored into the situation,” said an official at the Trade Ministry. “On the one hand, we have to consider the fact that Korea ships parts and intermediary goods to China [used to produce final goods shipped to the Unites States], which means a trade war between the United States and China would have a negative impact on us. On the other hand, we also must consider the effect of Chinese goods being restricted in the U.S. market and how this will impact similar products made and sold from Korea.”

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