The trade deficit with Japan surpassed $20 billion again last year. The photo shows a one-person protest in front of the Uniqlo Beomil branch in Dong-gu, Busan last year, calling for a boycott of Japanese products and apology and compensation from the Japanese government. News 1
– The trade deficit with Japan grew again last year.
According to the Ministry of Trade, Industry and Energy on the 9th, last year, Korea recorded a deficit of $2.84 billion (about 30 trillion won) in trade with Japan. Due to the influence of Japanese export regulations, it recorded a deficit of $19.916 billion, the lowest in 16 years in 2019, again in a year.
The trade deficit of $20 billion has been broken again and it is approaching the level of 2018 ($24.75 billion) before export regulations and boycotts began. Last year, exports to Japan (-11.8% compared to the previous year) dropped sharply, but imports (-3.5%) did not decrease that much.
Even now, you can easily find stores with posters for boycotting Japanese products. Japanese clothing brand Uniqlo stores are closing in a row. But why did Korea have a bigger deficit than a year ago?
Boycott wither? ‘Nono Japan’ still remains
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Japan’s still boycott. Graphic = Reporter Jaemin Shin [email protected]
– Japanese beer, a representative item of the boycott of Japanese products, has virtually lost its place in the Korean market. According to the Korea Customs Service’s import and export trade statistics, in 2019, Korea imported 3975 million dollars worth of Japanese beer. In 2020, the amount of imports has shrunk to 4922,000 dollars. That’s about a tenth level.
The same goes for Japanese cars. According to statistics from the Korea Imported Automobile Association (KAIDA), no Japanese car brand sold more than 10,000 units in Korea last year. Both sales volume and share were cut in half. Nissan and Infiniti, which could not withstand this, decided to withdraw from the Korean market last year.
Corona 19 blocked the export of Korea’s flagship products
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Export of flagship items blocked by Corona 19 to Japan. Graphic = Reporter Jaemin Shin [email protected]
– The reason for the increase in Korea’s trade deficit with Japan must be found elsewhere. The scale of products sold to Japan was much smaller than products bought from Japan last year. This is because the Japanese economy, which was hit by a new coronavirus infection (Corona 19), could not afford to buy Korean products.
Last year, Korea’s exports to Japan decreased by 11.8% compared to the same period last year (from January 1st to December 25th). The impact of the sluggish exports of flagship products was large. Exports of petrochemical products to Japan recorded -25.1% year-on-year, and steel (-23.3%), auto parts (-34.9%), and petroleum products (-32.5%) also recorded negatives. This is because some of the demand for automobiles and construction in Japan is recovering, but it has not recovered to the level before Corona 19.
The root cause is’small manager’
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The top item in the trade deficit with Japan is the’small manager’. Graphic = Reporter Jaemin Shin [email protected]
– A bigger problem is that Korea’s materials, parts, and equipment (minimal manager) industries are still highly dependent on Japan. The reason why the boycott was triggered was the export regulations that Japan applied to the three core materials required for the production of semiconductors and displays.
After the regulation, the government has declared to strengthen the competitiveness of the minor manager, but there is still a long way to go. Even if we look at the items with the largest trade deficit with Japan, most of them fall under the general manager. ‘Atomic reactors, boilers, machinery and their parts’, which are the items that suffer the most deficits in trade with Japan, recorded a deficit of $5768.97 million last year, and the amount of deficit increased by $ 791.66 million in one year.
The second largest trade deficit, “electrical equipment and its parts, recorders, audio players, television video and audio recorders, and players, and their parts and accessories,” also recorded a deficit of $4,053.68 million. In addition, the deficit of’plastics and plastic products’ also increased.
“The Japanese military may retaliate against the comfort women decision.”
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On the 8th, the Japanese military comfort women victims won the first trial of claiming damages against the Japanese government. The photo shows the Peace Girl statue in front of the former Japanese Embassy in Jongno-gu, Seoul. yunhap news
– The worsening of the trade deficit with Japan shows that Korea has not yet entered the stage of tangible results of sub-manager independence. Experts point out that when the Japanese government takes out the export control card again in response to the Korean court’s ruling for compensation for damages for Japanese military comfort women, South Korea should be ready to take this as an opportunity.
Sang-Ryeol Shim, a professor at Kwangwoon University’s Faculty of International Trade, said, “Before export regulations, Korea tried to find domestic production or substitutes for its core general managers. If Japan enforces export restrictions, Korea should strengthen the fostering of small managers as a cause.” Prof. Sim said, “Since we have been through export regulations once, we need to identify which items are vulnerable in advance and create a system to prepare for them with domestic companies.”
Sejong = Reporter Seongbin Lim [email protected]
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