Protectionism to put more strain on exports in post-virus era: report
A currency trader watches computer monitors near screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, Tuesday, May 12, 2020. AP
South Korea's exports, which have been hit hard by the new coronavirus that has halted global supply chains, are not likely to rebound immediately in the post-pandemic era, as its key trade partners are raising their guard to protect their own industries, a report showed Wednesday.
"Major countries, including the United States, are already intervening deeper into the market, disbursing large sums of subsidies to protect their industries," the Korea International Trade Association (KITA) said in its latest report.
The coronavirus has disrupted trade and suspended production around the globe, with a rising number of countries shutting their borders.
South Korean exports were earlier projected to rebound from a 10 percent on-year drop posted in 2019 on rebounding chip prices and the reconciliation between the U.S. and China, but the pandemic has dashed such hopes.
Exports declined a whopping 46.3 percent on-year in the first 10 days of May, government data showed. By segment, exports of memory chips, a key item, fell 17.8 percent, and those of automobiles plunged 80.4 percent over the 10 days from a year earlier, as the pandemic hurt demand.
The association, however, said even if the world successfully tackles the pandemic, major trade partners are anticipated to put more anti-dumping tariffs and other regulations in place to protect their own companies under rehabilitation.
In a separate report released earlier, KITA said five countries have already launched a total of seven new investigations into South Korean export goods during the first quarter of this year.
"The U.S. is also expected to increase its pressure (on China) on a wide array of issues, including subsidies, foreign exchange and export controls," the report added.
China and the U.S. are the top two export destinations for South Korea.
KITA, however, said the pandemic could have a silver lining.
"The pandemic is anticipated to beef up the industry for online commerce and businesses. This will also speed up the discussions on setting international norms on digital trade at the World Trade Organization," the association said. (Yonhap)