Steel, Automotive, Machinery, and Textile Industries Welcome RCEP at Government Meeting

Ministry of Industry Discusses RCEP Utilization and Other Measures with Promising Industry Associations

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] Industry associations and the government sectors expected to see export growth following South Korea's signing of the Regional Comprehensive Economic Partnership (RCEP) in steel, automotive, machinery, and textiles are set to discuss utilization plans after RCEP's enforcement.

The Ministry of Trade, Industry and Energy announced that it will hold a meeting at 3 p.m. on the 9th at the Government Complex Sejong. The Steel Association, Korea Automobile Manufacturers Association, Korea Machinery Industry Promotion Association, Korea Federation of Textile Industries, and Korea Petrochemical Industry Association will attend.

No Geon-gi, FTA Policy Officer at the Ministry of Trade, Industry and Energy, emphasized in his opening remarks, "Now that the final signing of RCEP is complete, it is time for the government and industry to cooperate in discovering and expanding promising export items," adding, "It is necessary to proactively prepare for the post-RCEP enforcement period by responding to changes in the regional value chain."

Industry groups stated, "Amid significant global trade uncertainties, we expect that the signing of RCEP will bring great opportunities for expanding exports of Korean companies."

First, the Steel Association explained that Korea's export share of steel products to RCEP countries increased from 46.8% last year to 53.2% this year. They also noted that ASEAN (Association of Southeast Asian Nations) steel demand is expected to rise from 73 million tons this year to 77.3 million tons next year.

The Korea Automobile Manufacturers Association mentioned that since Japan holds a 74% market share in ASEAN, it is necessary to strengthen the competitiveness of Korean companies in the ASEAN market and local production bases for exports to third markets through RCEP.

The Korea Machinery Industry Promotion Association emphasized that Korea's exports of general machinery to RCEP countries amounted to $23.3 billion last year, accounting for 44% of total exports. China followed with 23% ($12.3 billion), and Vietnam with 7.2% ($3.8 billion). They expect that with RCEP enforcement, exports of key items such as engines, pumps, optical instruments, construction and mining machinery, and other machinery will expand.

However, they stressed caution regarding the trade deficit with Japan. According to the Promotion Association, Korea has recorded an average annual trade deficit of $5 billion with Japan over the past 20 years.

The Association stated, "Since many machinery items in RCEP are excluded from concessions with Japan and have a 20-year tariff elimination period, we must build the competitiveness of our machinery industry."

The Korea Federation of Textile Industries noted that exports of textiles to RCEP countries account for 56% of the total. The number of overseas investment corporations in RCEP countries is 4,900, representing 82% of the total, and investment amounts to $7.27 billion, accounting for 69% of the total.

The Federation said, "Through this RCEP signing, by utilizing the unification of regional origin criteria and expanded origin accumulation, which strengthen supply chain connectivity, our textile industry needs to create new business opportunities."

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