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6. Signs of Protectionism Spread Around the World; Contraction in S. Korea’s Exports

2016-12-29

Signs of Protectionism Spread Around the World; Contraction in S. Korea’s Exports

South Korea’s exports contracted further this year amid signs of protectionism spreading throughout the world.

This year, South Korea’s exports saw minus growth for the second consecutive year apparently due to a fall in the volume of world trade for the second straight year.

With the sharp slump in exports, South Korea’s global ranking in terms of export volume slid from sixth to eighth.

South Korea’s exports had witnessed annual growth of nearly 40 percent in the 1970s. In the 1980s, exports surged more than 14 percent on average every year. However, entering the 1990s, growth fell to ten-point-six percent and stood at eleven-point-four percent in the 2000s. Since 2011, the growth of exports plunged to two-point-eight percent.

The picture became even gloomier last year. Between January 2015 and July of this year, exports posted minus growth, the longest period of such performance for South Korea.

The overall drop in the volume of world trade is largely what led to the export slump. China and emerging economies’ economic slowdown also negatively stirred South Korea’s exports.

Signs of protectionism spreading around the world in the wake of Brexit are making future prospects grim. In particular, U.S. President-elect Donald Trump is expected to further boost and expand protectionism.

In fact, South Korea has been slapped with around 25 percent more antidumping restrictions overseas this year compared to last year, which shows that trade walls are getting higher across the world.

However, not all prospects are grim. Minister of Trade, Industry and Energy Joo Hyung-hwan said on December 19th that exports in the fourth quarter are expected to rebound for the first time in two years. He also projected that exports will see growth in the two percent range next year. Top South Korean economic organizations, including the Korea International Trade Association, had earlier forecast that the nation’s exports will post growth between the two and three percent range in 2017.