KITA Survey: Diversification of Export Items and Markets Needed
43.3% of Respondent Companies Expect Export Decline This Year
Amid ongoing uncertainty over U.S.-imposed tariffs, the trade industry is reportedly hoping that the new administration will pursue a strategic trade policy. There was also a strong call for diversification of export items and markets.
According to a survey titled "Priority of Implementation for the New Government's Economic and Trade Pledges" released by the Korea International Trade Association on July 11, which targeted 416 senior executives in the trade sector, the industry identified "a strategic trade policy to maximize national interests and enhance industrial competitiveness (20.7%)" as the top pledge that should be prioritized by the new government. This was followed by policies such as "diversification of export items and markets (20.3%)" and "turning domestic market-oriented small and strong enterprises into export companies (18.1%)."
Among the specific tasks under the strategic trade policy, the most frequently mentioned was an active response to tariff risks originating from the United States. With the Trump administration in the U.S. imposing tariffs on Korea's main export items such as steel and automobiles, uncertainty in the trade environment has increased, and companies are hoping for export conditions that are not disadvantageous compared to other countries. There were also requests for expanding new free trade agreements (FTAs) and upgrading existing FTAs, as well as strengthening the trade response capabilities of both the government and the private sector.
The second highest priority policy was "diversification of export items and markets." Specifically, there was strong demand for fostering promising new growth items such as secondary batteries and biohealth, as well as for strengthening support to expand exports of consumer goods such as cosmetics and food. This reflects the recognition that, amid intensifying global export competition due to U.S.-imposed tariff issues, it is difficult to diversify export markets without first diversifying export items.
There was also a strong call to expand the foundation of the "Export Korea One Team" by enabling promising small and medium-sized enterprises that are currently focused on the domestic market to enter export markets. Some respondents suggested that it is necessary to advance integrated support packages that cover the entire process from product development to practical training and marketing. This appears to be aimed at expanding the base of export companies so that they can be more resilient to external shocks.
Other priorities included: realizing an "AI export powerhouse" by fostering the artificial intelligence (AI) industry and linking it to export industries (9.5%); establishing a trade security enforcement system to protect domestic export industries (7.5%); and achieving "logistics security" by securing national-flag vessels (7.0%).
The trade industry's export outlook was not optimistic. Among respondent companies, 43.3% said that exports this year would decrease by more than 5% compared to last year, exceeding the proportion who expected exports to remain similar to last year (38.9%) or to increase (17.8%). As many as 71.1% of companies answered that export recovery would come "after next year." In particular, the smaller the company in terms of employment size, the greater the concern about export decline and delayed recovery, highlighting the urgent need for support focused on small enterprises.
Jung Heecheol, head of the Trade Promotion Division at KITA, said, "The trade industry hopes that the new administration will reliably establish a stable trade environment, diversify technology-intensive export items, and facilitate the transition of small and medium-sized enterprises into export companies. We expect the new government to actively support exports so that we can wisely overcome external risks such as U.S.-imposed tariff issues and the strengthening of protectionism, and upgrade our export momentum to the next level."
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