South Korean steel industry is expected to benefit from the regional free trade agreement RECP as member nations are likely to take up around 53.2pc share in South Korea’s steel exports, up significantly from the prior years, according to local media.
Ministry of Trade, Industry and Energy of South Korea expressed optimism about the Regional Comprehensive Economic Partnership (RCEP) mega-trade agreement that could increase the competitiveness of the country’s steel and auto exporters in the near future, as per local media reports. Steel exports are expected to rise sharply in 2021 as global economies overcome the impact of the COVID-19 pandemic. Amid the growing uncertainties due to the pandemic and protectionist stance taken by many countries, RCEP will grant exporters access to new markets, along with unified trade rules.
RCEP nations account for a-third of the world’s GDP. ASEAN countries along with other trade partners South Korea, China, Japan, Australia and New Zealand signed RECP in November. The South Korean government aims to strengthen strategic and economic relations with Southeast Asian countries under its new southern policy. Local businesses are actively preparing for the official implementation of the RCEP. They are finding prominent and appropriate export goods and adapting to the changing value chain within the union.
Southeast Asian steel demand is bound to increase in the coming years, while in the auto sector, the annual demand for automobiles in ASEAN is estimated at around 3.5mn, boosting the export of cars and auto parts from Korea.
Ministry anticipates better exports to Malaysia and Cambodia. Along with exporters of steel, auto, machinery and textiles will get the benefit. Of which more than half share is already occupied by the RCEP nations. The Korea International Trade Association projected that South Korean exports could recover by 6pc in 2021 as pandemic-hit economies recover.
In November, exports rebounded by 4pc from the prior year in the latest sign of a possible recovery. Early in the year, South Korean exports had recorded a 14-month high in February, however, amid the pandemic exports dropped successively in the coming months with exports down by 25.6pc in April and 23.8pc in May.