Technical Hurdle to Exports
It has been pointed out that international environmental regulations, which are becoming more and more stringent nowadays, are becoming an important variable in Korea’s export activities.
According to a report published on January 6 by the Korea International Trade Association (KITA), 253 out of the 1,550 technical and trade barriers that were put into effect across the world in 2012 are to serve the purpose of environmental protection. The ratio is 16.3%, which is the highest in history.
The number had stood around 180 for years, but surged in 2012, as environmental issues began to rapidly emerge. Between January and November 2013, the percentage reached 14.8%, or 221 out of the total of 1,491.
In particular, advanced economies are introducing a series of new and more stringent environmental regulations one after another to pose an increasing burden on Korea’s exports. For example, from this year, the EU is going to force all airline companies taking off from or landing in its member countries to participate in the carbon trading system, which is sure to cause a rise in air cargo transport costs. In addition, the use of harmful chemical substances, such as parabens, in cosmetics products is prohibited, while the import of cars not satisfying exhaust gas emission standards have been banned.
The US government, in the meantime, has introduced the Energy Guide Label system. All refrigerators and washing machines sold in the US must have a label providing information about annual energy consumption, energy efficiency grade, and maximum and minimum energy cost. China is tightening its standards associated with chemical substances used in jewelry and decorative goods, too.
Such environmental regulations are likely to act as export barriers, especially against small and mid-size enterprises. The report advised that proactive countermeasures are required in the form of constant monitoring and the development of eco-friendly materials and energy-saving products.