Impact of Strengthened Protectionism... Record High 228 Import Restrictions Targeting Korea Last Year

KOTRA, Report on South Korea Import Regulation Trends in the Second Half of 2020 and Outlook for the First Half of 2021

Busan New Port
Photo by Yonhap News

[Asia Economy Reporter Kim Heung-soon] As protectionism has intensified in various countries due to the COVID-19 pandemic, the number of import restrictions imposed on South Korea reached a record high of 228 cases as of the end of last year.

According to KOTRA's report titled 'Trends in Import Restrictions Against South Korea in the Second Half of 2020 and Outlook for the First Half of 2021' released on the 4th, a total of 228 import restrictions were imposed on South Korea by 26 countries as of the end of last year. This is the highest number ever recorded.

Import Restrictions Against South Korea Nearly Doubled Over 10 Years from 117 Cases in 2011
Emerging Markets Account for 66% of Total Restrictions Last Year

The number of import restrictions targeting South Korea has been increasing every year, from 117 cases in 2011 to 127 in 2013, 166 in 2015, 187 in 2017, 210 in 2019, and 228 in 2020.

Import restrictions are broadly categorized into anti-dumping, countervailing duties, and safeguards (emergency import restrictions), including those currently under investigation. In the second half of last year, new import restriction investigations were initiated in 9 countries, totaling 18 cases (8 anti-dumping, 9 safeguards, and 1 countervailing duty). Cases where restrictions were lifted amounted to 16 cases across 10 countries. Compared to the first half of last year, the number of countries imposing restrictions decreased by 2, but the total number of cases increased by 2.

Classifying the 228 import restrictions last year by type, there were 164 anti-dumping cases (72%), 54 safeguards (24%), and 10 countervailing duties (4%). This includes 48 cases under investigation. By country, the United States led with 46 cases, followed by India with 33, China 16, Turkey 14, Canada 13, Indonesia 10, and Thailand 9. Among these, emerging markets such as India, the Philippines, and Thailand accounted for 151 cases, representing 66% of the total.

By product category, steel and metals (110 cases) and chemicals (53 cases) accounted for more than two-thirds, followed by plastics and rubber with 19 cases, textiles 17, electrical and electronics 8, and machinery 1. KOTRA explained, "Due to emerging markets' manufacturing promotion policies, last year saw a concentration of restrictions targeting intermediate goods such as steel and chemical products."

Source=KOTRA

Fierce Competition to Secure Leadership in Green and Digital Economies
Trade Environment Outlook for This Year Also Negative

KOTRA forecasts that this year, countries will continue to expand the introduction of green regulations such as carbon border taxes and trade and investment barriers related to future industries to secure leadership in the green and digital economies.

The United States is expected to introduce a carbon border tax while pursuing manufacturing policies that prioritize workers and the environment under the broad framework of reshaping the global value chain (GVC) centered on its own country. Existing tariff measures such as the Section 232 tariffs on steel and aluminum are more likely to be adjusted through consultations with related associations and stakeholders rather than being uniformly abolished.

China is expected to actively use import restrictions as a pressure card against other countries on political and economic issues. In fact, all seven new import restriction investigations initiated by the Chinese government in the second half of last year targeted the United States and Australia, with whom conflicts had occurred.

The European Union (EU) recently established a trade surveillance position to closely monitor compliance with trade agreements. KOTRA expressed concern, stating, "The EU is focusing on environmental and labor issues as well as unfair trade practices by third countries (anti-dumping and subsidies)," and warned that "the EU may intensify trade pressure on countries that fail to comply with trade agreements." Additionally, the United Kingdom, which withdrew from the EU, conducted a comprehensive review of the import restrictions currently enforced by the EU and independently imposed a total of seven import restrictions as of January 1 this year.

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