Deputy Minister for Trade and Investment Park Tae-sung of the Ministry of Trade, Industry and Energy (MOTIE), Executive Vice Chairman Han Jin-hyun of the Korea International Trade Association (KITA) as well as representatives and CEOs from KOTRA and the Small and medium Business Corp. (SBC) and companies in the Gyeongsangnam-do area participate in the first meeting of the export expedition team held at Gyeongnam Techno Park in Changwon, Gyongsangnam-do, on Jan. 31. (Photo: MOTIE)
As exports are forecast to maintain negative growth in January for the second straight month, economic ministries, including the Ministry of Economy and Finance (MOEF) and the Ministry of Trade, Industry and Energy (MOTIE) are scrambling to take steps to reverse the trend.
A task force, formed with officials from MOEF, MOTIE and other economic ministries, was working out steps to boost exports, to be announced around the end of February. Detailed steps to provide support to overseas plants, content and agro-fisheries segments are to be followed up.
The MOTIE began to listen to the voices of related ministries to turn around declining exports on Feb. 7.
The government’s move comes amid a warning that exports, the major bulwark of the national economy, showed signs of suffering a setback for the second straight month recently. Figures released by the government showed that exports registered a minus 1.2 percent growth last December compared to the same period of 2017. Exports also declined 5.8 percent in January 2019, compared to a year earlier. When price fluctuations are factored in, real export volume is forecast to grow 3.1 percent this year, the Bank of Korea said. But the Central Bank predicted that the value of exports for 2019 will decline 1.4 percent over last year.
Steps to boost exports, which are now in the making, are mostly likely to be inclusive of the expansion of financial support to exporters. At a meeting on Jan. 30, Deputy Prime Minister-Minister of Economy and Finance Hong Nam-ki hinted that the government may consider expanding loans, using accounts receivable as a collateral, saying that the most difficult thing in the market is to receive financial support while exporting.
Steps to support each export item are also expected to be worked out.
Earlier, the government announced steps to boost the mainstay industries, including ones to revitalize the shipbuilding and automotive parts industries last November and last December, respectively.
MOTIE Minister Sung Yun-mo toured the Asiana Airlines cargo terminal of Incheon International Airport on Feb. 2, despite the Lunar New Year holiday, as part of the government’s efforts to provide comprehensive support to the Korean export industry.
Incheon International Airport handled 33 percent of the nation’s total exports in 2018 or $20 billion. The airport is Korea’s No. 1 export gateway and the 3rd largest hub port in Northeast Asia in terms of international cargo handling. When Minister Sung arrived at the cargo terminal, display cargo was loaded onto a cargo aircraft bound for Guangzhou, China, via a cargo bridge despite the Lunar New Year holiday.
Minister Sung inspected the airport’s export cargo clearance and transshipment process and gave words of encouragement to crew members who were working hard despite the holiday.
He said Korea saw exports surpass the unprecedented $600 billion threshold last year, but business conditions of the Korean export industry were unfavorable this year due to external factors such as declining chip prices and crude oil, the sagging global economy and the escalating trade disputes between the United States and China.
He told people on hand at the scene the government and the private sector should join forces in mobilizing all resources so that the nation could keep on maintaining growth momentum this year as it did last year.
On Jan. 21, the MOTIE inaugurated government-private sector joint support teams such as an export expedition team and a corps designed to handle trade disputes and export complaints. In particular, the export expedition team convened its first meeting at Gyeongnam Techno Park in Changwon, Gyeongsangnam-do, on Jan. 31. Eleven organizations, including the Ministry of SMEs and Startups (MSS), and the Korea International Trade Association (KITA), inaugurated the team to lend an ear to the voices of exporters across the nation.
In the first meeting in Changwon, a center of machinery and equipment makers, the export expedition team promised the extension of the maturity of trade credit guarantees provided by Korea Trade Insurance Corp. (K-SURE) to automotive parts makers. Among steps to provide support to the machinery and aviation industry are considering extending the repayment period of short-term operation funds extended by the Small and medium Business Corp. (SBC) from one year to five years.
KITA Vice Chairman Han Jin-hyun said the manufacturing industry is a key of Korea’s export industry, and Changwon is one of the nation’s prime manufacturing cities. They came here to hear the difficulties the industries experienced due to declining shipbuilding and plant orders and find out solutions, he added.