$1 Tln in Total Trade Projected for 2011

President Lee Myung-bak calls for extensive efforts to push for a further increase in exports at the 47th Trade Day event

At the 47th Trade Day ceremony at COEX in southern Seoul, the Export Tower was presented to 1,536 firms in recognition of those companies’ contributions to boosting Korea’s exports this year. Winners included Samsung Heavy Industries Co., Doosan Heavy Industry and Construction Co., Hyundai Mobis Co. and Honam Petrochemical Co. Among a slew of dignitaries attending the event was President Lee Myung-bak, Minister Choi Kyung-hwan of the Ministry of Knowledge Economy and Chairman Sakong Il of the Korea International Trade Association (KITA) and top executives of large and small businesses engaged in the exports of their products and services.
President Lee in his congratulatory speech said exports have long been powerful sources of the nation’s economic prosperity And this year, too, exports have surged to record levels in many areas, paving the way for Korea to become a great exporting nation. The G20 Summit has further lifted Korea’s global image to confirm its powerful status in international trade.
“Various indicators show stability in the Korean economy including the exchange rate and the stock market, an indication that the Korean economy has grown mature enough to withstand all kinds of adversities and, thus, win trust in the international community.
“This year, we are about to set a new record in exports and trade surplus with exports of $460 billion, advancing Korea to the seventh largest exporting nation in the world. We launched Trade Day when exports totaled $100 million in 1964, and half a century later our exports broke all kinds of records to rank seventh in the world. Next year, our total trade will reach $1 trillion, a sign that Korea ranks among the five biggest nations in the world in terms of trade, led by the United States and China,” Lee said.
KITA Chairman Sakong Il said Korean exporters have to upgrade the quality of their products, designs and R&D activities in order to lead the advance in Korea’s international image and the expansion of Korean exports in the years ahead. In his speech he said Korea is at a new point in its international relations. “We have to take a global leadership role in the international society, and the world expects us to assume a new role and responsibility as a leading export nation” the chairman said. “We have shouldered the duty to be a responsible member of the international society and be an advanced country through the growth of our exports.”
Vice Chairman Oh Young-ho of KITA said the outstanding feature of this year’s export record will be a larger trade surplus than last year. The reasons for the increase include surging export shipments of key export products like autos and semiconductors and the invigorated economies of emerging nations, despite oil prices ranging from $70 to $80 per barrel.
Medals and citations were given to 754 executives and staff working in exporting industries in recognition of their contributions to the growth of the nation’s exports this year, including five gold medals, five silver medals, nine bronze medals and 84 Presidential citations. Included among them were 11 heads of large companies, 184 heads of small and medium firms, 53 employees of large companies, 332 employees of small and medium companies, a number of foreign buyers and explorers of overseas export markets, among others.
Those who received gold medals included Roh In-shik, president of Samsung Heavy Industrial Co.; President Chung Bom-shik of Honam Petrochemical Co.; Chairman Lee Jang-han of Chongundang Bio Co.; Chairman Chung Se-il of Ilsung Co.; and President Park Ju-bong of KC Co.
The Export Tower was first presented to companies whose exports amounted to more than $100 million in 1973. This year, Samsung Heavy Industrial Co. won the $10 billion Export Tower for its exports of new ships followed by G Chemical with the $8 billion Export Tower and Hyundai Mobis snatching the $6 billion Export Tower.
This year’s total exports are projected to reach $466 billion, up 28.2 percent YoY, with imports projected at $424 billion, up 31.2 percent YoY, resulting in a trade surplus of $42 billion, the largest figure so far in the history of foreign trade for Korea, KITA said. Next year, the nation’s exports are projected to total $516 billion, breaking the $500 billion barrier for the first time, up 10.7 percent from this year. Major products that will lead exports include semiconductors, LCDs, automobiles, auto parts and others, while imports are projected to increase substantially due to an increase in oil prices. Industrial producers of most major products will see increases with the exception of wireless communication equipment.
From January to October, major export products including liquid devices increased 33.4 percent YoY, home electronic appliances climbed 30.8 percent, semiconductors were up 75.6 percent, auto parts were up 69.9 percent, textiles rose 19.4 percent, ships rose 10.6 percent, petrochemicals jumped 32.2 percent, computers were up 14.6 percent, automobiles climbed 44.1 percent, general machinery rose 34.9 percent, steel products increased by 23.4 percent and oil products were up 28.5 percent, among other products rising by two digits, KITA said. By region and country, exports to China rose 37.1 percent, to ASEAN economies 31.8 percent, the EU 17.3 percent, the United States 33.3 percent, Central and South America 44.5 percent, Japan 29.2 percent and the Middle East 16.5 percent, among others.
Among major exporting countries, Korea ranked seventh after the United States, China, Germany, Japan, the Netherlands and France, but it overtook such countries as Italy, the Netherlands and Britain. It ranked ninth last year, but jumped to seventh position this year.
The outstanding characteristics of this year’s exports expansion have been the rise in overseas production plants of large companies led by autos, cell phones, TVs and computers, along with the supply of parts and materials to advanced countries and exports to emerging market countries including India and Slovakia. For these reasons, exports to China account for 24.9 percent of all exports, Mexico 2.2 percent, Slovakia 1 percent and India 2.5 percent. With demand for fuel and transport equipment slowing, exports of materials to materials exporting countries like Russia and Canada and auto exporting countries such as Japan and Germany slackened substantially.
Exports for next year are likely to face ups and downs depending on the speed of global economic growth and oil price changes, but Korea should not have much trouble surpassing $500 billion in exports. KITA projects exports next year will amount to $516 billion, up 10.7 percent, and imports will rise to $485 billion, up 14.4 percent, totaling more than $1 trillion in total trade for the first time in Korea’s history, with a trade surplus projected at $31 billion.
KITA said the world economy will certainly grow next year, but not as fast as it needs to grow, and the won’s exchange rate is projected to appreciate slowly, while the price of oil will likely rise by a small amount. They added that the free trade agreement with the EU will help Korean exports.
A factor not to be missed in the KITA assessment of Korea’s exports is that policy help will be needed to move the Korean economy forward, especially regarding exports. Policies should be directed at stabilizing the won’s value vis-a-vis the U.S. dollar as well as micro-readjustments of economic fundamentals, as the FTAs with the EU, Peru and other countries will come into effect and the government should encourage Korean exporters to take advantage of them.
KITA also urged the government to encourage Korean exporters to put into good use the human connections made through the G20 Summit in Seoul making it a base for expanding exports so that balance will be achieved between exports to advanced nations and emerging nations. nw

President Lee Myung-bak delivers his congratulatory speech at the 47th Trade Day ceremony on Nov. 30 held at Coex in southern Seoul. (Courtesy on Cheong Wa Dae)

Boosting Exports to Emerging Nations
Deputy Minister Kim Kyung-sik, in charge of the Trade and Investment Policy at the Ministry of Knowledge Economy (MKE), introduced the new trade policy vision in the age of the G20 at the Trade Day ceremony, following President Lee Myung-bak’s presentations of medals and citations to the winners.
The deputy minister said in 2015, Korea’s exports will have grown large enough to rank 7th largest in the world under the government policy to expand Korea’s exports to emerging markets to $700 billion, fostering 500 small and medium firms and building a new advanced trading system through free trade agreements.
The new vision aims at pushing exports to emerging market countries with tailor-made products targeted at certain markets. The government will expand economic ties with those countries and build trade infrastructure centered on those new export markets.
The government will encourage small exporters to cooperate with large firms to help pave their way into overseas export markets and globalize their operations with government support in the area of building overseas-advancement infrastructure.
The trade official pointed out various problems for Korean firms to explore export markets in emerging markets including the lack of strategies by region and country, except for China and ASEAN countries.
Korean exports to China accounted for 9.9 percent of China’s imports, while it came to 5 percent for ASEAN countries and 3 percent in the world export market based on 2008 statistics.
A big problem he pointed out has been the lack of information on emerging market countries and the special characteristics in those regions and countries. Another problem has been the linkage between FTA agreements and government trade policies. Diverse FTAs are being pushed with a number of countries, but have only been signed with India, Chile and ASEAN so far. Trade infrastructure has been built centered on advanced countries and the base for advancement into new emerging markets has been rather weak in such areas as network marketing infrastructure and manpower. KOTRA and other trade-related organizations’ activities have been based on advanced countries.
Kim also revealed the lack of services including marketing, financial and manpower training that those small companies need.
To pave the way for small firms to expand their exports to emerging markets, the government recommends strengthening education, consultations on FTAs by setting up FTA Support Centers at KOTRA, Korea International Trade Association (KITA) and the Korea Chamber of Commerce and Industry, among others. In connection with the promotion of the establishment of an ‘integrated trade information construction project,’ those centers will conduct education on how to take advantage of the FTA with the EU coming into force in July 2011.
The government plans to train FTA experts through FTA courses in university curricula and expand classes on FTAs to three courses at “FTA Schools” to provide lessons on the basic workings of an FTA, regional export strategies and FTAs by export products.
The new vision also includes building a base for the service industry to export services and the government will support the service exports by providing support to such areas as marketing, guarantee brand and trade insurance. The government sees risk insurance service exports rising to 2.5 trillion won in 2013 from 1.2 trillion won this year and culture export insurance to 1.2 trillion won in 2013 from 500 billion won this year.
The cultural export insurance will cover such products as films, TV dramas, games and publications. KOTRA brand guarantee will extend to 50 brands in 2013, rising from just 5 brands in 2010.
The government will set up the service export support team to help solve various problems that service product exporters face and expand awards to further encourage service product exports.
The government will also provide massive support to the exports of nuclear power plants, industrial plants and SOC projects. It will send the overseas market exploration teams to various countries to search for projects and consultations in those countries. The government will encourage the launching of consortiums among companies to secure large projects and also provide consultations on marketing strategies through the project support centers. nw