[Square] Looking Forward to Trade Leadership in the Pandemic Era

Hanjin-hyun, Executive Vice Chairman of the Korea International Trade Association

Hanjin-hyun, Executive Vice Chairman of the Korea International Trade Association

Three months after the declaration of the novel coronavirus infection (COVID-19) pandemic, we truly feel the significantly elevated status of the Republic of Korea worldwide. Korea has achieved remarkable results not only in quarantine but also in the economic sector, which advanced countries envy.

In the economic outlook announced by the International Monetary Fund (IMF) last April, Korea's growth forecast for this year was the highest among the 37 member countries of the Organisation for Economic Co-operation and Development (OECD). Moreover, despite pessimistic forecasts that global trade volume could decrease by more than 30%, Korea's export decline rate in the first quarter was 1.7%, the best among the world's top 10 exporting countries, and its export ranking rose by one position to 6th compared to the same period last year. Although the trade balance recorded a deficit for the first time in 99 months in April, it returned to a surplus in May, just one month later. Some express concern over the reduced surplus in May, but this is not necessarily negative, as it reflects the continued import of capital goods necessary for the normal operation of our manufacturing industry.

Korean companies are also responding swiftly to the rapidly changing lifestyles and consumption patterns after COVID-19. As non-face-to-face (untact) related industries such as e-commerce, remote education, and telecommuting grow rapidly, exports of computers and solid-state drives (SSD) from January to May increased by 79% and 176%, respectively, compared to the same period last year. Preferences for Korean quarantine products and the spread of awareness about hygiene and health have also led to significant increases in exports of medical supplies, hygiene products, and clean home appliances.

Although our exports have endured the crisis well, the prolonged infectious disease situation makes it difficult to be optimistic about the future. Exports in May, following April, decreased by more than 20% compared to the previous year. This is partly inevitable due to production stoppages and movement restrictions in various countries, shrinking global demand, and the sharp drop in international oil prices, but the outlook remains cloudy. It is difficult to predict how long the pandemic will last, and as conflicts between the United States and China intensify, uncertainty in the trade environment is also increasing.

In response to the crisis situation where an 'export cliff' could become a reality, a focal point is needed to lead strategies suitable for the post-COVID era. In response, the government held the 'Expanded Trade Strategy Adjustment Meeting' chaired by the Prime Minister on the 10th of this month, following the meeting in February. As a result, our companies are receiving over 300 trillion won in trade finance this year to alleviate liquidity shortages and are supported in participating in video consultations and online exhibitions to cope with entry restrictions in various countries. The government is also operating a crisis alert system for the supply and demand of key items such as semiconductors to ensure stable global supply chains, whose importance has been highlighted by the infectious disease situation.

At the Korea International Trade Association level, in cooperation with the Ministry of Trade, Industry and Energy, a system to resolve corporate difficulties is being established and operated, and charter flights have been urgently deployed to Chongqing, Jakarta, Narita, and Frankfurt to overcome export-import logistics difficulties. The 'Korea-China Fast Track' window, which minimizes quarantine procedures for Korean businesspeople entering China, is also in operation.

The Odongdo Lighthouse, shining over the sea in front of Yeosu, bears the inscription 'Amyadogwang (暗夜導光),' meaning 'guiding light in the dark night.' Like a lighthouse that shines a ray of hope in the pitch-black night sea, leadership that enables the government, companies, and support organizations to unite and navigate through the waves of economic crisis amid unprecedented complex crises cannot be overemphasized. As we prepare for the post-COVID era beyond the pandemic, we look forward to trade leadership that can seek survival and new opportunities for our companies and present a vision for Korean trade.

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