Exports fell 10.2 percent from a year earlier in July, extending their losing streak to a record 19th consecutive month, the Ministry of Trade, Industry and E…
Shipments down 10.2%, falling 19th straight month
By Lee Hyo-sik
The ministry expects exports to turn around this month on a possible rebound in demand from overseas.
However, many analysts and company officials say that this would be short-lived, citing increasing protectionism and a worsening trade environment.
Korea faces growing barriers around the world as its trade partners move to restrict imports in order to protect their industries amid the continued global economic downturn.
The increasing global protectionism has adversely affected steelmakers and other manufacturers here, which ship most of their goods abroad. Both advanced and developing economies are imposing anti-dump duties or taking other administrative measures to limit the influx of made-in-Korea goods into their territories.
To ride out the increasing tariff and non-tariff barriers, domestic manufacturers need to make more efforts to hone their core competence and develop high value-added products, analysts say.
They added that the government needs to do its part by providing up-to-date foreign market information to local exporters, as well as taking various steps to prevent trade partners from imposing import restrictions on Korean goods.
According to the Korea International Trade Association (KITA), Monday, seven countries ― India, the United States, EU, Mexico, Turkey, Taiwan and Malaysia ― have imposed anti-dumping duties on or taken safeguard measures against Korean steel and other products in the first six months of the year. These import restriction cases totaled 20, up from 12 in the same period last year.
Of the 20, 16 cases were initiated by India and other developing economies, indicating that Korean manufacturers are having a harder time selling their goods in emerging markets.
The Indian government launched an anti-dumping probe in April into hot-rolled steel plates produced by POSCO and other local steelmakers after Indian firms accused their Korean rivals of selling the plates at lower than production costs.
A month later, India, which is the fourth-largest export market for domestic steel firms, initiated safeguards against Korean hot-rolled steel by levying a 20-percent additional tariff. As a result, Korea’s steel exports to the South Asian nation from April to June fell 50 percent from a year earlier.
Advanced economies have also stepped up efforts to limit the imports of various goods from Asia’s fourth-largest economy.
On July 21, the U.S. government decided to impose a 48 percent anti-dumping tariff on Korea’s corrosion-resistant steel products. A day later, it also levied up to 68-perent anti-dumping tariffs on cold-rolled steel plates produced by POSCO and Hyundai Steel.
In response to the growing protectionism, analysts are calling on domestic firms to take extra caution when shipping their goods abroad.
“It is true that Korea’s trade partners have become more protective of their domestic industries over the past year amid the prolonged economic downturn,” said Han Chang-hoe, director of KITA’s international trade cooperation department. “Once companies are accused of dumping their goods in foreign markets, it is really hard for them to get away from it. They must not get into trouble in the first place.”
Han then called on the government to play a more active role, stressing that policymakers should aggressively advocate the interests of domestic businesses on the international stage.
In July, with the exception of computers, most major export items suffered a steep fall. Shipments of vessels plummeted 43 percent to $1.99 billion, and exports of automobiles dropped 14.6 percent.