Free trade with northern neighbors is mootedGo north, advises Finance Minister Hong Nam-ki.
Following the New Southern Policy of 2019, he says that business should start to set its sights on Russia, Mongolia and Central Asian countries.
“We will focus on the New Northern Policy that will open the possibility of economic cooperation with northern countries,” Hong said during a minister-level meeting on Monday.
He said the government will also work on establishing a free trade belt with northern countries, especially Mongolia and Central Asia.
The finance minister said the Korean government will focus cooperation with Russia on the so-called nine bridges. These are trade-related infrastructure and systems, including railroads, power grids, ports, shipping routes and agriculture and fishery industrial complexes.
Hong said concerns about global trade support the diversifying of Korea’s export markets.
“2019 was a year in which global uncertainty was high and included the trade conflict between United States and China, Brexit and Hong Kong,” Hong said. “And there were several trade issues that needed to be solved, such as Japan’s export controls and World Trade Organization issues.”
He said not only was there a spread of trade protectionism, but also a worsening global value chain that contributed to the slowest increase in global trade in a decade.
“Even a new phrase was created: ‘slowbalization,’” Hong said. “Under the difficult conditions of the new abnormal, the government has worked to minimize the influence of external factors on our local economy and financial markets.”
While the global market is showing signs of stabilizing, with the United States and China agreeing on the first phase of its trade negotiations and the Middle East geopolitical controversy easing, the finance minister said this year the Korean government will focus on extending the rebound.
“Last year was the year in which we were focused mainly on the New Southern Policies, which included President Moon Jae-in touring 11 countries in the southern regions and Korea hosting the Korea-Asean Commemorative Summit. This year, which is the year in which Korea celebrates 30 years of trade with Russia and Mongolia, will be the year of cooperation with new northern economies,” Hong said.
The finance minister also said the government will support the Regional Comprehensive Economic Partnership, a regional trade agreement, this year.
“We will certainly see through the rebound of exports by supplying 240 trillion won [$207 billion] of export finance,” Hong said.
The Korean government has expressed optimism about the rebound of Korean exports since late last year, banking on the improvement of semiconductor demand.
According to the Korea Customs Service, in the first 10 days of this month, exports grew 5.3 percent.
The government expects a full recovery of exports in March, as this month the export of goods will be limited due to the long Lunar New Year holiday.
On-year export growth declined by double digits last year.
BY LEE HO-JEONG [email@example.com]