Minister Moon Sung-wook of the Ministry of Trade, Industry and Energy convened a meeting to take stock of trade and supply chain networks at the Korea Chamber of Commerce and Industry (KCCI) on Jan. 13.
The meeting was intended to help find ways to continue the momentum for exports, which reached a record last year, and cope with the recent uncertainties of the supply chain networks.
Representatives from the semiconductor, car, bio and machinery industries took part in the meeting, discussing ways of expanding exports and stabilizing supply chain networks.
In attendance were major industry associations, Korea International Trade Association (KITA), KCCI and economic organizations, as well as export support institutions, including KOTRA, K-sure, and Korea Eximbank.
In his speech at the meeting, MOTIE Minister Moon said, “Korea demonstrated a potential and strength as businessmen in the trade industry and people joined forces in fulfilling the best-ever export and trade achievements and the national economy recovered to the pre-COVID-19 pandemic levels.”
But of late, several dangerous factors still remain, such as raw material price hikes, the global logistics quagmire and unstable supply chain network, Minister Moon said.
Despite an outlook of a more than 2 percent rise in exports for this year, Moon predicted that it is not easy to attain it.
In particular, in the first quarter of this year, he said a rise in crude oil, gas and other energies, intermediate items and capital goods are predicted to worsen the trade deficit, so the nation has a task of maintaining export growth and expanding trade volumes.
To this end, he said, the government will thoroughly manage risks related to raw material supplies and export and import logistics, and concentrate on building institutional countermeasures to stabilize supply chain networks.
Minister Moon called for the public and private sectors to join forces with a spirit of unified teamwork this year, as the nation did last year.
The latest meeting looked into the trade situation for this year, took stock of supply chains issues’ impact on each industry, and focused on working out countermeasures to expand exports and stabilize supply chains networks.
Takeaways of the meeting included the forecasting of export growth on the back of the recovery of the global economy, existing uncertainties such as the destabilization of supply chains networks caused by the resurgence of the pandemic, and U.S.-China technology hegemony, plus export and import logistics quagmire.
Exports and imports are predicted to grow more than 2 percent, sustaining trade momentum seen last year, but growth is forecast to slow down a litter due to reaction to the basic effect of last year’s high growth rate.
Most of the businesses, including petroleum products, cars, chips, display, bio/health and secondary batteries are likely to see exports rise this year on the back of the recovery of upstream industries and the construction industry, transition to the digital economy and rising demand for eco-friendly industries.
On the other hand, steels, shipbuilding and home appliance are projected to decline a little, influenced by a reaction to the basic effect of last year’s high growth rate.
Steel and textile businesses are unlikely to be influenced by the disruption of supply chain networks by stockpiling products in advance and diversifying supply chains networks, while the electronics, secondary batteries, petrochemicals and machinery industries have inaugurated their own supply chains management task forces or consultation committees to work out the restructuring of business portfolios and expanding value-added item portfolios on their own.
Car and shipbuilding industries are forecast to suffer intermittent disruption of parts and raw material and equipment, so constant management is required such as import diversification and procuring alternatives in Korea.
Textile, petrochemical, and electronics industries called for expanding logistics support against the protracted logistics quagmire while semiconductor and bio industries asked for increasing information related to major countries’ import restrictions.
Business side proposed expanding of official development assistances (ODA), targeting emerging markets, ramping up trade financing support targeting export companies and expanding the dispatching of trade delegations.
During the meeting, MOTIE came up with 2022 trade outlooks and measures to promote trade, calling for managing trade risks, mobilizing all resources to ramp up export dynamics and expanding trade base for stable growth among others.
The government plans to expand R&D of promising export items, support the globalization of small businesses and startups and front-load trade financing and export marketing in the first half and implement steps to ease export and import logistics quagmire.
It plans to expand R&D support for 10 promising export items, including “Big Three,” to 1.2 trillion won while ramping up support for eco-friendliness and low carbon at businesses such as steel, shipbuilding and home appliances feared to have a reaction to the basic effect of last year’s high growth rate.
With the enforcement of the Regional Comprehensive Economic Partnership (RCEP), effective Feb. 1, the government ramps up support to expand Korean companies’ entry into emerging markets.
