FKI "Korea's Top 15 Key Export Items Forecasted to Decline by 7.8%"

[Asia Economy Reporter Cho Hyun-ui] The Federation of Korean Industries (FKI) forecasted that South Korea's exports would suffer a significant blow this year due to the novel coronavirus disease (COVID-19) outbreak.

On the 5th, the FKI announced that it would urgently propose a "Trade and Commerce Policy Proposal for Overcoming the COVID-19 Economic Crisis" to the government, containing these details.

According to the FKI's survey, as COVID-19 spread to the United States and Europe in March, exports of 15 major items to these regions and China are expected to decrease by 7.8% this year compared to the previous year. The FKI explained that this figure represents a decline of more than 10 percentage points compared to the 3.3% and 2.2% increases predicted by the Korea International Trade Association and the Korea Economic Research Institute in November last year, before the COVID-19 outbreak.

By industry, exports of general machinery (-22.5%), displays (-17.5%), ships (-17.5%), automobiles (-12.5%), and textiles (-12.5%) are expected to be severely impacted. Exports of home appliances (-12.0%) and wireless communication devices (-11.0%) are also anticipated to decline.

Semiconductors (0.6%) and computers (5.0%) are expected to see export growth due to increased IT demand driven by the rise in non-face-to-face interactions. In particular, biohealth (25.8%) is projected to experience a sharp increase in exports due to growing medical and health-related demand amid the COVID-19 spread.

The FKI requested the government to proactively resolve corporate difficulties in the trade and commerce sectors. First, it urged the government to swiftly lift entry bans imposed by countries such as Vietnam on Korean businesspeople and to facilitate exceptions for entry by issuing health certificates at the government level.

It also proposed that aggressive pursuit of multilateral and bilateral free trade agreements (FTAs) is necessary to open new export channels. The FKI pointed out that while South Korea's exports utilizing FTAs have stagnated since the Korea-China FTA took effect in 2015, competitor Japan has been aggressively opening export channels through FTAs by leading the launch of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Accordingly, the FKI specifically proposed completing the signing procedures for the Regional Comprehensive Economic Partnership (RCEP), involving 16 Asia-Pacific countries, in the first half of the year; follow-up negotiations on services and investment under the Korea-China FTA; and fast-tracking FTAs with new southern and northern countries such as the Philippines, India, and Russia. It also included a demand to expand currency swap agreements with key currency countries such as Japan, the EU, and the United Kingdom to preemptively block the possibility of a foreign exchange crisis.

Kim Bong-man, head of the FKI's International Cooperation Office, said, "Although COVID-19 has struck the financial and real economies of China, the United States, and the Eurozone?South Korea's largest export regions?since March, we hope the government will leverage South Korea's elevated status gained through the COVID-19 response process to resolve corporate difficulties in the trade and commerce sectors."

This content was produced with the assistance of AI translation services.