Targeted Market Strategies for ASEAN and Middle East... Strengthening Export Capabilities Across All Ministries

President Yoon Chairs Export Strategy Meeting
ASEAN, US, China as 3 Major Target Markets
Middle East, Latin America, EU as 3 Strategic Markets
Tailored Precision Support by Category

President Yoon Seok-yeol Answering Questions on His Way to Work
(Seoul=Yonhap News) Ahn Jung-won = President Yoon Seok-yeol is answering questions from reporters as he arrives at the Yongsan Presidential Office Building in Seoul on the morning of the 18th. 2022.11.18 [Presidential Office Photojournalists Group]
jeong@yna.co.kr
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The government's initiative to consolidate national export capabilities stems from concerns that South Korea's economic growth rate could fall to the 1% range next year, facing a perfect storm (a massive complex crisis). There is a strong determination across all ministries to respond at the forefront of exports. Trade, the backbone of our industry, has been unstable for eight consecutive months, with warning signs of a trade deficit reaching $40 billion annually. President Yoon Suk-yeol recently emphasized at a Cabinet meeting that "ultimately, our lifeline is exports."

On the 23rd, at a meeting presided over by President Yoon on export strategy, he instructed the preparation of solutions to address field difficulties raised mainly by small and medium-sized export enterprises, reflecting the same context. A senior official from the Presidential Office said, "Due to high interest rates, domestic demand and investment are challenging," adding, "Exports are the only sector where we can rely on performance." With consumption and investment both shrinking due to monetary tightening policies responding to high inflation, there are concerns that the growth rate will decline, making it necessary to find a breakthrough through exports.

5 Major Economic Zones, Strengthening ASEAN as Korea's 2nd Largest Trading Partner

The core of the 'Export Regional Specialization Strategy' announced by the government that day is to divide markets into three major main markets (ASEAN, the United States, China) and three strategic markets (Middle East, Latin America, European Union (EU)) and provide tailored, pinpoint support. Notably, following the existing major export markets of the U.S. and China, the government's export response plan for the ASEAN and Middle East markets?on which President Yoon has recently focused through his Southeast Asia tour and summit diplomacy with Saudi Arabia?is a noteworthy aspect.

According to the World Economic Forum (WEF), ASEAN is one of the world's five major economic zones (based on GDP) and South Korea's second-largest trading partner (accounting for 18.6% of exports). It is the region most closely linked to domestic industry and supply chains and a key partner in the Indo-Pacific strategy. ASEAN is expected to leap to the world's fourth largest economy by 2030, surpassing Japan, following the U.S., China, and the EU. It is currently experiencing the fastest economic growth globally, projected to grow 5.0% this year and 5.2% next year. The government focuses on trade with ASEAN, a massive production base with a population of 660 million and young labor force, rich in natural resources such as nickel and cobalt. The government plans to diversify its export dependence on Vietnam, which accounts for more than half (52.1%) of ASEAN exports, and the 84.8% reliance on intermediate goods exports.

In Vietnam, efforts are underway to advance international division of labor cooperation in automobiles, mobile devices, and displays. This includes the completion of Samsung's mobile research and development (R&D) center next month and Samsung Electro-Mechanics' expansion of a semiconductor substrate factory worth $800 million, key outcomes of economic cooperation supported by the government. In Indonesia, the plan is to increase trade hubs centered on core minerals, electric vehicles, secondary batteries, petrochemicals, and steel industries.

$500 Billion NEOM City Draws Attention in Middle East Market

The three strategic markets represented by the Middle East, Latin America, and the EU are closely related to South Korea's strategic export sectors such as defense, nuclear power, and infrastructure. In particular, Saudi Arabia's eco-friendly city construction project, epitomized by NEOM City, is likely to emerge as a key export region for Korean companies. NEOM City is a nationwide project investing $500 billion (approximately 668 trillion KRW) to build a futuristic eco-friendly city on a 26,500 square kilometer desert area near the Red Sea. Saudi Arabia is South Korea's largest crude oil supplier and the top construction order market. Korea is the optimal partner country for realizing the NEOM City project. Following Crown Prince Mohammed bin Salman's visit, the two countries agreed to expand the Vision 2030 committee system and regularize investment forums to strengthen business cooperation between companies.

The Korean government plans to launch the 'Korea-Saudi Economic Cooperation Public-Private Promotion Committee' (tentative name) to oversee planning and progress monitoring for the implementation of 26 memorandums of understanding (MOUs) signed this time. The scope of economic cooperation will be expanded to other Middle Eastern countries such as the United Arab Emirates (UAE), Qatar, and Oman, centered on Saudi Arabia. In Latin America, efforts are underway to enhance trade networks by signing new free trade agreements (FTAs) with major countries such as Mercosur. Strengthening mineral cooperation with key resource-rich countries like Chile and Brazil is a major task to stabilize supply chains. In the EU market, focus is on entering the European nuclear power market centered on a nuclear cooperation project with Poland. Along with nuclear power, support will be strengthened for exports of high value-added defense weapons such as fighter jets and armored vehicles.

The government will strengthen export capabilities of affiliated agencies under all ministries through export support specialized institutions such as KOTRA and the Korea Trade Insurance Corporation, providing comprehensive support. It plans to enhance the connectivity of export support functions by expanding information and personnel exchanges and promoting collaborative projects among agencies. Efforts will also be made to eliminate blind spots in export support. By revising the Foreign Trade Act, statistics will be established to easily verify export performance even for exports that have not undergone customs clearance, and export performance issuance procedures will be simplified. Support projects such as trade finance and marketing for non-customs-cleared exports will also be strengthened. The government stated, "We will concentrate cross-ministerial export capabilities and ensure thorough implementation of results through customized support."

President Yoon Suk-yeol and Crown Prince Mohammed bin Salman of Saudi Arabia in conversation
(Seoul=Yonhap News) Reporter Jeong Won Ahn = President Yoon Suk-yeol is seen having a conversation after concluding a meeting with Crown Prince and Prime Minister Mohammed bin Salman of Saudi Arabia, who visited Korea on the 17th. 2022.11.17 [Provided by the Presidential Office. Resale and DB reproduction prohibited]
jeong@yna.co.kr
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＜Copyright(c) Yonhap News Agency, unauthorized reproduction and redistribution prohibited＞

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