‘Protectionism to hurt Korea’s annual exports by 0.8 percent’

Global protectionism, likely to intensify with US President-elect Donald Trump’s pledge to up trade barriers for the US, is expected to hurt South Korea’s annual exports by 0.8 percent in the next four years, a central bank report said Wednesday.

Protectionist measures are tariffs and nontariff barriers that each government imposes on imports to protect local industries. In the wake of the 2008 global financial crisis, delayed recovery in the world economy has pushed countries to enhance nontariff measures such as anti-dumping actions, countervailing duties, technical barriers and regulatory measures, the Bank of Korea noted in the report.

The export-driven Korean economy suffered 0.5 percent loss in exports worth $2.4 billion in 2015 due to other countries’ protectionist measures, the report said. This year, the percentage had already exceeded 0.7 percent as of September.

By country, India had the highest number of anti-dumping actions with 68 in 2015, followed by the US with 56, Brazil with 54 and Turkey with 23, the report said. In terms of countervailing duties, which is an import tax to prevent dumping or counter export subsidies, the US ranked No. 1 with 30, trailed by Canada with 5 and Australia with 4.

Among exporters that suffered anti-dumping actions, China had the highest number in facing such trade barriers with 132 cases, followed by Korea with 29 and Taiwan with 21.

Korea had to suffer 41 anti-dumping actions in 2014-2015, more than double the number of 18 in 2008-2009.

By industry, goods in the steel and metal and chemical sectors accounted for 88 percent of exported goods that suffered trade remedies including anti-dumping actions in the first 11 months this year, the BOK said.

If the current trend of global protectionism continues, Asia’s fourth-largest economy will lose 0.8 percent of exports per year from 2017 to 2020, it said.

The figure could go even higher if Trump’s administration implements what he has said in his campaign pledges, the BOK noted. However, his protectionist stance is likely to weaken, considering he has to factor in many interested parties in the US and negotiations with other countries, it said.

Meanwhile, Korea’s exports rose 11.6 percent in the first 20 days of this month from a year earlier, the Korea Customs Service said.

Exports marked $27.1 billion in the cited period, up from $24.2 billion a year earlier. Semiconductors jumped 19.5 percent and cars gained 8.6 percent, while wireless devices declined 2.3 percent and auto parts fell 7 percent over the cited period.

By Kim Yoon-mi (yoonmi@heraldcorp.com)