Korea will shift its reliance on trade with China and the United States to emerging economies to foster new growth drivers in the face of rising protectionism, the trade ministry said Thursday.
Trade Minister Kim Hyun-chong announced the "New Trade Policy," which focuses on expanding trading territories and joining mega-trading blocs to boost exports of Asia's fourth-largest economy.
"We need to actively deal with the changing trading environment in the wake of protectionist practices in the United States and geo-economic risks in China," Kim said in a briefing. "We will expand the horizons to emerging nations in addition to G-2 and shift the focus from the manufacturing to service and new industries."
Korea has become the world's sixth-largest exporter in 2017 on the back of brisk sales of memory chips and a rally in oil prices. Shipments to China and the US accounted for 36.7 percent of the total, according to the ministry.
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(Yonhap) |
Seoul has been seeking ways to diversify its export market amid concerns over rising protectionist practices and intensifying trade tensions between the US and China, Korea's big two trading partners.
Korean companies have faced increasing import restrictions in various sectors under President Donald Trump's "America First" policy, including safeguard duties on its washers and solar panels. Korea received an exemption from a 25 percent steel duty from Washington, but it is subject to a quota of about 2.68 million tons, or 70 percent of the average exports to the US over the previous three years.
The two nations have reached a tentative agreement on revising their six-year-old trade deal, which focused on the further opening of Korea's auto market to the US
Korea and China have been in talks to expand the scope of their free trade agreement to the service and investment sector to further lower trade barriers between the nations.
China has been reducing its focus on manufacturing to restructure itself as a more service-oriented economy. China's service industry was rated at US$5.6 trillion in 2016, making it the world's second-biggest market.
The Seoul government said it will seek ways to promote trade with the world's big two economies through new trade deals, while expanding support for local companies to enter new markets.
The ministry plans to forge closer economic ties with Southeast Asian nations and India by accelerating negotiations to clinch the Regional Comprehensive Economic Partnership.
The RCEP currently involves 16 countries: the 10 member states of the Association of Southeast Asian Nations, as well as Korea, Australia, China, India, Japan and New Zealand.
RCEP, if signed, will be one of the largest regional free trade arrangements as the member states account for half of global production, as well as 32 percent of global gross domestic product and 29 percent of global trade, as of 2016, according to the trade ministry.
The ministry also vowed to step up economic cooperation with Russia and its neighbors through joint projects in the energy, transportation and shipping industries.
Under President Moon Jae-in's "New Northern Policy,"Korea and Russia have discussed ways to build "nine bridges" between the two nations: natural gas, railroads, seaports, electricity, Arctic shipping routes, shipbuilding, labor, agriculture and fisheries.
The Seoul government also plans to decide whether to join the fledgling Pacific trade pact within the first half of the year after looking into its impact on the national economy and consulting with member states.
A year after US President Donald Trump abandoned the Trans-Pacific Partnership, the 11 remaining member states last month signed a revamped deal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, in Chile.
The agreement that aims to slash tariffs on goods to stimulate trade will come into force after it is fully ratified by six of the 11 members -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The countries represent 13.5 percent of global gross domestic product, a total of $10 trillion.(Yonhap)
