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Korea has become the ninth country to exceed USD one trillion in trade. The citizens, companies, and the government of Korea worked without rest to catch up with more active trading nations.

As the Korean economy has developed along with its trading growth, Korea’s main export items have changed. Unlike the past when export items were mainly raw materials like iron ore or tungsten, Korea now exports products that require technology like automobiles, semiconductors, and ships.

The port of Busan is expected to ship 16.2 million containers this year (photo: Yonhap News).

"There is no doubt that the Korean economy is very steady and strong," said Supachai Panitchpakdi, Secretary-General of United Nations Conference on Trade and Development (UNCTAD) on November 9, at a conference co-hosted by the Peterson Institute for International Economics (PIIE) and the Korea International Trade Association (KITA). "Asia should learn from Korea, the country that has recovered from several crises. Korea always has exported more than an average amount of items and will maintain its trend.”

Korean became the ninth country in the world to have its trade volume exceed USD one trillion, following the U.S., Germany, China, Japan, France, England, and Italy. Joining this 'one trillion club’ means that Korea’s trade has advanced from the periphery to the center of the world’s market.

The development of trade is linked with the development of the economy. This especially holds true for Korea, where the economy is heavily dependent on overseas imports. Last year, Korea’s trade dependence was 84.6%. The development of its economy and trade has always gone hand-in-hand.

The contribution of Korea’s exports to its economic growth has averaged 67.9% per year from 2000 to 2011, reaching nearly 172% in 2009. The exports in 2010 helped the country to create nearly 4 million jobs and added values of 256.6 billion USD.

Used cars are loaded onto cargo ships at the port of Ulsan (photo: Yonhap News).

Korea’s status as a trillion USD trading partner is particularly significant because it took less time to reach the milestone than other countries. The average time required for the other eight countries to increase their trade volume from USD 100 billion to one trillion was 26.4 years, while it took Korea only 23 years. In 1946, Korea’s trade volume was USD 64 million, and by the end of 2011 it is expected to grow to USD 1.085 billion. Over the same period, its world trade rank also jumped from 65th to ninth. The country that relied on a foreign aid has now become a country with a gross national income of USD 20,759.

Moreover, raw materials including iron ore and tungsten are no longer the main export items of Korea anymore. After exporting mainly textiles in the 1970s and ‘80s, Korea has become an exporter of such items like ships, semiconductors, mobile phones, and automobiles. Based on its list of exports in 2010, the top export item of Korea was automobiles followed by semiconductors and ships.

Semiconductors are the second largest export item of Korea (photo: Gonggam Korea).

However, there are still some problems ahead for the country. The global economic crisis is still affecting many countries including Korea, and the country needs to reinforce its trade structure.

Korea is also expanding its free-trade partnerships. The relationship between Korea’s various FTAs with Chile and the ASEAN region and the volume of trade has proved its positive effects. Thanks to the FTAs, trade between Korea and Chile has increased nearly four times and the Korea-India FTA has remarkably contributed to the volume of trade between the two countries within a year.

Meanwhile, the Ministry of Knowledge Economy predicted that Korea will reach a trade surplus of USD 34 billion this year. The Korean government will celebrate this achievement of USD one trillion in trading by hosting various events on December 12, the 48th Trade Day. On December 7, Korea Post began selling a commemorative stamp at its branches depicting Korea’s main export items including semiconductors and mobile phones to celebrate the landmark achievement.

* Article adapted from Gonggam Korea website

By Jessica Seoyoung Choi
Korea.net Staff Writer