Gov't to give SMEs more trade insurance discount to boost exports

The government said Wednesday that it will provide more trade insurance discounts to small and medium enterprises to help stimulate the country's falling exports.

The Ministry of Trade, Industry and Energy said the insurance discount rate for SMEs will be raised from the current 30 percent to 50 percent. This, it said translates into some 17.5 billion won ($15.2 million) worth of indirect assistance being given to exporters on an annual basis.

The announcement made at a meeting of trade-related ministries and state-run organizations in Seoul comes at a time when Asia's fourth largest economy is trying to cope with 10 straight months of negative export growth.

In October, outbound shipments nosedived 15.8 percent on-year, with numbers for the first nine months of 2015 contracting 6.6 percent vis-a-vis the same period in 2014.

In addition, the ministry in charge of promoting trade said it will systematically support growth of organic light-emitting diode technology and next-generation computer chips that have the potential to become the country's next growth engines.

"Tariff quota rates on OLED-related equipment will be slashed from 5-8 percent to zero," it said. The ministry added that it will push to extend tax breaks for research and development expenses in this sector, which will allow more money to be poured into the development of new know-how.

The government will, moreover, set up a special taskforce to help the export of various consumer goods and ask lawmakers to ratify the free trade agreements signed with China, Vietnam and New Zealand. China is South Korea's No. 1 export market.

The ministry also said that it plans to host a large scale export promotion fair in the country that will be attended by some 500 foreign buyers, so local companies will be able to meet one-on-one with prospective business partners.

It said about 2,000 local exporters will be at the gathering slated for early December. (Yonhap)