Due to Trade Barriers
The Ministry of Trade, Industry & Energy announced on January 16 that South Korea’s component and material exports fell 4.8% from a year ago to US$251.9 billion last year while its imports of the same items fell 4.5% to US$152.5 billion during the same period. The surplus, US$99.4 billion, decreased 5.3% as well.
According to the ministry, the decline in the exports can be attributed to the trade protectionism of multiple countries, China’s processing trade restrictions, etc. The exports fell 11% in the first quarter of last year, 6.7% in the second and 2.3% in the third before increasing 2.0% in the fourth. The component and material exports accounted for 50.8%, an all-time high, of South Korea’s total exports.
Those to China, the Middle East, Latin America and the United States decreased 11.5%, 14.6%, 12.1% and 0.7%, respectively. On the contrary, those to Vietnam, ASEAN countries, Japan and Europe rose 25.7%, 8.9%, 3.2% and 0.3%, respectively.
South Korea’s electronic component exports declined by US$8.5 billion to US$38.7 billion in 2016. Reasons for this include low international oil prices, which led to a decline in purchasing power in the Middle East and Latin America. Still, the implementation of the Korea-Vietnam FTA resulted in a 43.9% increase in electronic component exports and a 47.1% increase in electrical and mechanical component exports to Vietnam.
The total electronic component exports fell 10.5% like those of textile products (down 9.3%), primary metal (down 5.5%), components for transport machinery (down 4.6%), general machinery components (down 3%) and compounds and chemical products (down 2.7%). In contrast, those of computers and office equipment (up 12.3%), rubber and plastic (up 3.5%) and electrical and mechanical components (up 3.5%) showed some positive growth.