Increasing Momentum of 'Export Boom'... Additional 7 Trillion Won Export Financing Support

Zero Tariff Rates Applied to Naphtha and LPG Until Year-End

The government will accelerate the export boom by jointly providing an additional 7 trillion won in export financing through public-private cooperation and applying a 0% tariff rate on naphtha and liquefied petroleum gas (LPG) until the end of the year.

On the 3rd, the government finalized and announced the "Export Condition Review and Additional Support Measures" at the Economic Ministers' Meeting. This measure was established through a pan-governmental joint effort to support the resolution of corporate difficulties arising from expanding external uncertainties and differing export conditions by industry and company, in order to accelerate the recent robust export boom.

Kang Kyung-sung, First Vice Minister of the Ministry of Trade, Industry and Energy. (File photo)

Kang Kyung-sung, First Vice Minister of the Ministry of Trade, Industry and Energy, explained, "Although cumulative exports from January to May this year increased by 10.1%, showing a favorable trend, it is still insufficient to achieve the export target of 700 billion dollars. We have prepared additional support measures such as supplying a record-high trade finance of 365 trillion won and reducing the tariff rate on naphtha as a catalyst to achieve the export goal."

Recently, exports have led GDP growth, recording double-digit growth rates for two consecutive months in April and May this year after turning positive in the fourth quarter of last year. The government has set a record-high export target of 700 billion dollars for this year. Exports need to increase by 10.7% compared to last year, requiring an additional export expansion of 0.6 percentage points.

The government will first expand export infrastructure to reduce corporate burdens caused by changes in finance, support systems, and trade environments. This year, the scale of export financing by policy financial institutions will be expanded by 5 trillion won to supply a total of 365 trillion won, and export preferential products of the five major commercial banks will be expanded by 2 trillion won, providing a total of 7 trillion won in additional export financing through public-private cooperation.

Evaluation indicators for the service quality of export voucher implementing agencies will also be newly established, and export support projects of each ministry will be announced in an integrated manner. Additionally, cooperation agreements (MOUs) will be signed between overseas bases by sector to strengthen pan-governmental collaboration to support export companies. This is intended to improve the efficiency of the export support system. Furthermore, to resolve corporate difficulties arising from changes in the trade environment, the provision of information on trade technical barriers will be strengthened, and customs clearance systems will be improved to allow multiple online platform companies to consolidate packaging for export.

Support will also be provided to strengthen export competitiveness by industry. To respond promptly to global demand, the number of trucks allowed for liquefied natural gas (LNG) ship refueling will be increased from the current two to a maximum of four, and boarding reports required for ships reported for export will be exempted for companies with excellent export-import safety management. In addition, to alleviate corporate burdens on key imported raw materials and items, procedures to omit post-management of key imported goods before import declaration will be completed, and the applied tariff rate of 3% on naphtha, LPG, and crude oil used for manufacturing naphtha and LPG will be set to 0% until the end of the year.

Quantitative and qualitative growth of exports by small and medium-sized enterprises (SMEs) and mid-sized companies will also be pursued through customized support based on company characteristics. Small business owners will receive a 50% reduction in fees for using KOTRA's overseas market research service until the end of the year, and new small business export statistics will be produced and published. Tech companies with excellent technological capabilities will be given additional points in export support projects and preferential financing, and a dedicated export support track for domestic companies in the consumer goods and franchise sectors will be established. Support for exports of domestic and early-stage companies will be provided through the expansion of growth-based export financing targets. In response to recent increases in logistics costs, the second half support for export vouchers will be promptly executed, and additional logistics cost support measures will be reviewed if necessary. Furthermore, to overcome the growth cliff of mid-sized companies, export support projects such as overseas certification support will be expanded to include mid-sized companies.

Vice Minister Kang said, "To maximize the support effect for export companies, who are our policy customers, we will streamline support projects among ministries and strive to create collaborative synergy. As the main ministry in charge of exports, the Ministry of Trade, Industry and Energy will take the lead in ensuring that all ministries become export ministries and provide full support as one team." He added, "We will carefully manage the smooth implementation of these measures and pay closer attention to the difficulties faced by the export field."

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