Non-tariff barriers double against Korea

Korean exporters are facing increasing non-tariff barriers around the world, making it harder for the export-oriented economy to sell its goods abroad.

According to the Korea Chamber of Commerce and Industry (KCCI), Korea’s trade partners including the United States and India have taken a total of 134 non-tariff steps against Korean exporters between January 2012 and November this year, more than double the previous corresponding period. From 2008 to 2012, local firms were hit with a combined 65 non-tariff measures around the globe.

In contrast, a total of 4,652 non-tariff steps were taken globally over the past four years, down 3.8 percent from the previous corresponding period, indicating that Korea has become a victim of the world’s growing protectionist movement.

Firms exporting food and other perishables faced sanitary and phytosanitary measures on 19 occasions during the 2012-to-2016 period, up from five. Domestic steelmakers and other manufacturers were hit with anti-dumping duties on 105 occasions, up from 57.

By country, the United States took the most non-tariff measures against Korean businesses at 24, followed by India (16), Australia (14), Brazil (12) and Canada (8).

“Trade protectionism will intensify after Donald Trump becomes the U.S. president next month. The United States and other major economies will erect higher non-tariff barriers to limit the influx of foreign goods,” a KCCI researcher said. “Korea can file a complaint with the World Trade Organization when trade partners hike tariffs on its exports. But it is difficult to do so when countries mobilize non-tariff measures.”

According to the KCCI, the United States imposed anti-dumping duties on Korean steelmakers, based on “biased” data from its steel industry. China has also reopened the 2014 case in which it levied anti-dumping duties on made-in-Korea polysilicon in order to impose additional duties.

“It is more problematic that China has begun raising non-tariff barriers against Korean exports. This could deal a severe blow to local firms,” the researcher said.

In 2015, about 26 percent of Korea’s outbound shipments headed to China. Of this, intermediate goods account for 73.5 percent.

The world’s second-largest economy already seems to have taken various non-tariff steps against Korean entertainment firms to limit the influx of hallyu content.

“Worse, China’s protectionist stance has spread to other sectors. Chemical goods and fuel cell battery makers here are facing increasing difficulties shipping their products to the mainland,” he said.

Individual firms cannot deal with rising trade barriers abroad, the KCCI said, advising them to pursue closer cooperation with the government.

“Companies should first be well aware of customs and other trade regulations, prior to shipping their goods abroad,” the researcher said. “If they fail to clear their goods through foreign customs, they need to seek help from the Korea Customs Service and other state agencies.”