"Turning Crisis into Opportunity"... Government Supports Export of COVID-19 Driven Non-Face-to-Face Trade and Medical Supplies

Announcement of 'Measures to Boost Export Vitality' at the 4th Emergency Economic Meeting
Full Support for Contactless Exports... Utilizing Online Exhibition Networks
Comprehensive Export Support for 7 Major Promising Products Including Diagnostic Kits

Asia Economy DB=Photo by Honam Moon munonam@

[Asia Economy Reporter Kim Bo-kyung] The government is expanding non-face-to-face online trade and online exhibitions to support export companies. It will actively support the export of promising products such as diagnostic kits and promote special charter flights for overseas business trips of small and medium-sized enterprises (SMEs) and mid-sized companies.

On the 8th, the government held the '4th Emergency Economic Meeting' chaired by President Moon Jae-in and announced the 'Measures to Revitalize Exports.' The plan includes measures to resolve export difficulties caused by COVID-19 and stabilize the global supply chain.

Non-face-to-face trade, one-stop support... Full mobilization of overseas networks

The government will fully operate a non-face-to-face export support system. The offline buyer matching process will be implemented online as is. A system will be established to support one-stop contract conclusion, linking 'video consultation → contract signing → payment → export declaration.' The video consultation infrastructure will be expanded from 5 to 89 locations domestically, and from 44 to 120 locations overseas using KOTRA trade centers and others.

The 'Online Korea Exhibition' utilizing augmented reality (AR) and virtual reality (VR) will also be revitalized. There are plans to operate 50 special exhibitions and 10 permanent exhibition halls. It will be organized mainly around canceled or postponed exhibitions using public institution B2B platforms.

KOTRA, the Small and Medium Business Corporation, and other overseas networks will be fully mobilized to act as overseas branches for SMEs and mid-sized companies. Available network resources include ▲KOTRA = 129 trade centers in 84 countries (500 personnel) ▲Small and Medium Business Corporation = 129 companies in 37 countries (about 3,700 personnel) ▲Korea International Trade Association = 11 overseas branches in 8 countries (70 personnel) ▲World Federation of Overseas Korean Traders Associations = 98 global branches in 55 countries (429 personnel), etc.

Special charter flights for exports promoted... Expansion of cargo transport

While resolving entry and exit restrictions as much as possible, the government plans to operate special charter flights for overseas business trips of export SMEs and mid-sized companies. It will also support the entry of overseas engineers necessary for operating core production facilities. As of the 2nd, ▲116 people have undergone expedited visa issuance review ▲15 people have been granted extensions of stay ▲286 people have applied for quarantine exemption. Going forward, the government plans to spread a standard model for exceptional entry of businesspeople using bilateral and multilateral channels such as G20 and ASEAN.

[Image source=Yonhap News]

Air and maritime routes will be increased to expand cargo transport. For air transport, measures include ▲increasing cargo routes using idle passenger planes ▲subsidizing 50% of the increase in air freight for export SMEs (total 2 billion KRW, 300 companies) ▲expanding tariff exemptions on air freight. For maritime transport, support includes ▲expanding Korea-China-Japan ship operations (5 billion KRW) ▲increasing routes to the Americas and Europe ▲deploying additional large vessels to resolve difficulties.

Support will be strengthened for products with rapidly increasing exports due to COVID-19, such as diagnostic kits and hand sanitizers. The plan is to find new demand channels in the non-face-to-face economy and turn the crisis into an opportunity. In fact, exports of diagnostic kits increased by 117% and hand sanitizers by 604% last month.

The government has designated medical supplies, hygiene products, health foods, home cooking, home beauty, clean home appliances, and digital devices as the '7 promising product groups' and will actively support related companies' overseas expansion. In particular, Korean-made diagnostic kits, which are attracting global attention, will see expanded domestic production and export support including specimen matching expansion, emergency use approval, logistics, customs clearance, marketing, investment, and guarantees.

To stabilize the global supply chain, the scope of key item inspections will be expanded. This is in preparation for possible disruptions in global supply chains including China, the U.S., the EU, and Asia following Japan. Considering import volume and dependency, the number of items will increase from the existing 100 to 388 worldwide.

Additionally, supply and demand situations for six major industries?automobiles (26 items), semiconductors (15 items), home appliances (39 items), chemical products (57 items), machinery equipment (74 items), and textiles (27 items)?will be managed continuously.

The government will expand domestic return of companies, attract investment, and increase overseas company M&A while diversifying supply chains centered on New Southern Policy countries and advanced countries in materials, parts, and equipment. It plans to actively utilize the Korea Trade Insurance Corporation's special guarantee for supply chain diversification (100 billion KRW).

Meanwhile, the government will inject a total of 2.2 trillion KRW in support funds targeting SMEs and mid-sized companies conducting R&D projects under the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, and the Ministry of Science and ICT. The private burden ratio will be reduced from a maximum of 35% to 20%, and support for personnel expenses will be expanded from only new hires to existing staff as well. This year, technology fee payments will be deferred or reduced for up to two years, and financial requirements such as debt ratio will be temporarily relaxed.