Imports help Korea become trade powerhouse

``Exports are good and imports are bad.’’

This could be a general belief for many people in Korea as the country has chalked up fast growth over the past decades through focusing on outbound shipments of a range of merchandise.

However, Korea Importers Association （KOIMA） Chairman Lee Ju-tae points out that the nation could not have attained its economic achievements without the help of inbound shipments.

``With Korea set to reaching $1 trillion in trade volume this year, imports are as significant as exports,’’ Lee said in an interview with The Korea Times earlier this week.

``In addition, approximately 90 percent of today’s imported goods are composed of such items as crude oil, machinery and raw materials, which have a direct bearing on our exports.’’

The government expects that Asia’s fourth-largest economy will rack up $513 billion in exports and $488 billion in imports in 2011 so that overall trade will be more than $1 trillion.

Lee said that the remaining 10 percent of imports including automobiles, cosmetics or other consumer goods have also contributed to the competitiveness of domestic firms in many ways.

``Our flagship automakers, Hyundai Motor and Kia Motors, fare well thanks in no small part to BMW, Mercedes-Benz and Lexus, which offer competitive pressure,’’ the 54-year-old said.

``Plus, advanced pharmaceutical products and agricultural produce enrich people’s lives as well as offering a variety of merchandise. In multiple senses, imports greatly matter to Korea.’’

Recognizing the importance of inbound shipments, KOIMA has a set of priorities; the most outstanding of which are to help local importers and to try to realize trade balances with our partners.

No major countries have organized import-oriented entities similar to KOIMA, which has focused on the above-mentioned tasks since its foundation in 1970, according to Lee.

Assistance to local importers

While matching overseas exporters with Korean importers, KOIMA has attempted to be of help to both players.

From the perspective of importers, the KOIMA index has offered authoritative data for them to rely on at a time when the costs of resources briskly fluctuate.

KOIMA has come up with the index every month, which gauges the import price of 30 raw materials including crude oil, steel, farm produce and metals to name but a few.

``Beginning this year, we plan to jack up the number of raw materials studied from the current 30 to 56 so that importers can preemptively grapple with the ups and downs of resource values,’’ Lee said.

``Toward that end, we are poised to launch a dedicated Web site in the near future so that importers can learn how the cost of resources move on global markets on a real-time basis.’’

Furthermore, the Seoul-based organization is looking to introduce several sub-indices for specific categories of imported goods like steel, agricultural products or petro-chemicals.

``We also work on materials whose supply is limited such as rare-earth elements. The stable sourcing of metals is essential but data on them are also vital. Our job is about data,’’ Lee said.

Rare-earth elements are a collection of 17 chemical elements in the periodic table. They are indispensable in producing high-tech or eco-friendly products like electric cars, wind turbines and liquid crystal displays （LCD）.

Korea, home to the world’s top-tier LCD manufacturers, does not mine rare-earth metals at all and banks wholly on imports. Its annual demand of about 3,000 tons is mostly met by shipments from China.

Trade balances

Another crucial task of KOIMA is to assist offshore exporters to find those who are ready to buy their products. This is also related to how to balance bilateral trade.

``Among some 230 trade partners of Korea, up to 170 suffer from trade deficits with us. This is feared to generate bilateral tension and we put forth efforts to deal with them,’’ Lee said.

In order to fulfill the goal, KOIMA has carried out a host of activities like the KOIMA Purchasing Mission and a mega-sized exhibition, dubbed the Import Goods Fair （IGF）.

KOIMA sends several purchasing missions every year to visit around 15 countries where it holds business seminars and organizes “matchmaking” meetings with Korean importers and suppliers there.

For example, a purchasing mission comprising approximately 50 Korean companies visited India midway through this month to take part in a business forum and other conventions between the two nations.

Included in participants were some 20 large-sized Korean conglomerates such as Samsung Electronics, Hyundai Motor and POSCO as well as up to 30 small-sized enterprises, which were interested in buying materials in India.

Lee said that the mission created an amiable atmosphere as the presence of the aforementioned outfits demonstrated that Korea

cares about trade balances. Currently, India faces a big deficit in trades with Korea.

Over the June 9 to 11 period, KOIMA looks to hold the IGF 2011, the country’s only fair geared toward imports, at the COEX, southern Seoul.

Lee said that the ninth annual event will open the doorway to Korean markets to global suppliers.

``To induce as much participation as possible, we strive to offer booths to poor firms in some developing countries after consultation with their embassies,’’ Lee said.