Over 3,000 Trade Technical Barriers (TBT) Accumulate Annually... 'South Korea's Export Path Narrows'

[Asia Economy Reporter Hwang Yoon-joo] With the rise of protectionism in developed countries and the increasing trade technical barriers (TBT) mainly among major exporting countries, concerns have been raised that South Korea's export routes may become narrower.

On the 21st, the Korea Chamber of Commerce and Industry (KCCI) analyzed recent trends and characteristics of trade technical regulations and presented policy tasks and countermeasures in its report titled "Trends and Response Tasks of Trade Technical Barriers (TBT)".

According to the report, trade technical barriers (TBT) have increased by an average of 11% annually since the establishment of the World Trade Organization (WTO) in 1995. Especially since 2018, over 3,000 technical barriers have emerged for three consecutive years, setting new annual records. In the past 15 years, the number of TBT notifications worldwide increased 3.7 times (897 cases in 2005 → 3,354 cases in 2020), while regulations from South Korea's top 10 export countries increased even more, by 5.2 times (164 cases in 2005 → 849 cases in 2020).

Among the newly reported TBT notifications to the WTO (cumulative), health and safety-related matters such as restrictions on hazardous substances were the most numerous at 13,638 cases. This was followed by quality-related matters such as technical standards with 4,575 cases, consumer protection issues such as false labeling with 4,401 cases, and environmental protection with 3,444 cases.

By country, the United States had the highest number with 1,847 cases, followed by China (1,460 cases), the EU (1,360 cases), Israel (1,230 cases), and Uganda (1,227 cases). South Korea ranked 9th with 1,014 cases. The New Southern Region (India + ASEAN, 11 countries), which is a target for diversifying South Korea's exports, had 1,866 cases, surpassing the US, China, and the EU.

The KCCI stated, "Due to the US-China trade dispute and the rise of protectionism, Korean companies urgently need to diversify export markets to emerging countries, but the reality is that export barriers are increasing not only in major export countries but also in developing countries." It added, "Since many regulations are related to health and safety, the government should actively expand support for responding to trade technical regulations."

The KCCI report identified recent characteristics of trade technical barriers as strengthened digital and environmental regulations, increased regulations in emerging countries, and strengthened regulations through new free trade agreements (FTAs).

The report pointed out that digital and environmental trade technical regulations have been expanding recently, citing the EU Cybersecurity Act (2019), the US Federal Information Security Management Act (2014), and China's Cybersecurity Law (2017). In particular, the EU's eco-design regulations related to the environment are expected to add requirements evaluating not only energy efficiency but also product durability and recyclability in the future. Technical regulations such as expanding the use of renewable energy are acting as new trade barriers.

The increase in TBT cases in emerging countries (65.1% in 2005 → 75.6% in 2020) was also noted as a recent trend. In 2017, the number of new TBT notifications from least developed countries already surpassed those from developed countries. Emerging countries are using trade technical barriers to foster their industries and protect consumer safety. Major emerging countries tend to have relatively many regulations on automobile items, while environmental and health-related regulations are fewer.

Additionally, the report mentioned that trade technical barriers are being strengthened through new FTAs. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) established technical standards that were not included in existing FTAs. For alcoholic beverages, labeling and attachment methods were specified; animal testing for cosmetics was banned, and marketing authorization procedures were removed. In the information and communication sector, requirements for specific encryption and algorithms were prohibited. The report pointed out that preparation for trade technical regulations is necessary to join the CPTPP.

The report urged companies to secure response capabilities to trade technical barriers. To this end, it suggested ▲ rapid response to TBT (using WTO e-Ping and the Korean Agency for Technology and Standards' KnowTBT for notification guidance) ▲ utilizing government support for TBT consulting and regulatory response ▲ actively participating in government technology cooperation projects ▲ securing specialized personnel for technical regulation response ▲ preparing for global trend changes through ESG (environmental, social, and governance) management.

Furthermore, as government policy tasks, the report recommended participating in international standardization processes to lead international standards and strengthening technical standard cooperation with developing countries to prepare for market diversification. It also emphasized the need to quantify government response achievements such as TBT damage levels and support for small and medium enterprises to improve the response system. Alongside this, it advised revitalizing problem-solving through bilateral cooperation, FTA committees, and WTO committees, and proactively responding to technical regulations by monitoring recent technology trends.

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