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5. THE REPUBLIC OF KOREA


5.1 Overview of the economy

As one of the more dynamic economies of Southeast Asia, the Republic of Korea (known generally as South Korea) has achieved an incredible record of growth. Three decades ago, its GDP per capita was comparable with levels in the poorer countries of Africa and Asia. Today its GDP per capita is seven times that of India, 13 times that of the Democratic People’s Republic of Korea (North Korea), and comparable to the lesser economies of the European Union. This success through the late 1980s was achieved by a system of close ties between government and business, including directed credit, import restrictions, sponsorship of specific industries, and a strong labour effort. The government promoted the import of raw materials and technology at the expense of consumer goods, and encouraged savings and investment over consumption. The Asian financial crisis of 1997-99 exposed certain longstanding weaknesses in South Korea's development model, including high debt/equity ratios, massive foreign borrowing, and an undisciplined financial sector. By 1999, it had recovered financial stability, turning a substantial decline in 1998 into strong growth in 1999. Seoul has also pressed the country's largest business groups to swap subsidiaries to promote specialization, and the administration has directed many of the mid-sized conglomerates into debt-workout programmes with creditor banks. The major economic challenge for the next several years presumably is the maintenance of the pace of market reforms to restore the old growth pattern.

5.2 Trade policies

South Korea’s global imports grew rapidly in 2000. Exports increased 20.1% to US$ 172 600 million, the economy grew by more than 9% in 2000, and some steps have been taken to create a more open, market-oriented economy by breaking linkages between governments, banks and chaebol (conglomerates).

Korea did not bind any tariffs for fish products in the Uruguay Round. Its applied tariffs for fish products are 10% for frozen whole fish and frozen fillets. Otherwise the tariffs are 20%.

Under its Uruguay Round commitment, Korea also established tariff-rate quotas (TRQs) intended to either provide minimum access to a previous market or maintain pre-Uruguay access. In-quota tariff rates are zero or very low, but over-quota rates on some products are prohibitive. Duties are still very high on many high-value agricultural products, including fishery products.

Most imported goods no longer require government approval, but some products, mostly agricultural sector items, face import restrictions, such as TRQs with prohibitive over-quota tariffs. Korea implements quantitative restrictions through its import licensing system.

The lack of transparency in rulemaking and in Korea’s regulatory system continues to hamper a foreign firm’s ability to compete in the Korean market. Many Korean trade-related laws and regulations lack specificity. Imported food products remain particularly susceptible to capricious interpretation of ambiguously worded labelling and product categorization standards.

5.3 Fisheries data

Commodity Balance (1996, preliminary, excluding aquatic plants)


Production

Imports

Exports

Total food supply

Per capita supply

‘000 t live weight

kg

Fish for direct human consumption

2 252

618

607

2 263

50

Non-food uses

520

231

121

630

-

Estimated Employment (1995):

Primary sector:

347 000, of which 83 052 classified as full-time workers

Secondary sector:

N/A.

Gross Value of Fisheries Output (at ex-vessel prices) 1996: US$ 3 225 million

5.4 Production

The Republic of Korea's total production of fish and fish products has been quite stable during the 1990s, though there has been a small decline. The exception was production of squid, cuttlefish and octopus, as well as mackerel and red seaweed, that all increased. In 1999, the major products were squid, cuttlefish and octopus, with a production of 591 087 t, followed by herring, sardines and anchovies (283 726 t), brown seaweed (254 920 t), mackerel, etc. (254 920 t), tunas (213 334 t) and red seaweed (208 610 t). Korea has, however, a varied production of seafood and several other species are important. For details, see Appendix.

Figure 15. Total seafood production of the Republic of Korea, 1990-1999 (quantity; tonnes)

5.5 Exports

5.5.1 General

In 1998, the Republic of Korea was the 17th-largest exporter of fish and fish products, when ranked by value, with total exports of 561 235 t, worth US$ 1 250 million. During the 1990s, Korea’s exports saw a small decline from 1991 to 1994, but from 1995 on there was a steady increase. This has not been reflected in the export value, which from 1995 has been decreasing, with the 1998 value the lowest in this period.

Figure 16. Total seafood exports from Republic of Korea

5.5.2 Trading partners

As Figure 17 shows, Japan and China are the main markets for Korean fish products, with USA, Thailand and Spain also important markets. Other countries are of minor importance for trade.

Figure 17. Seafood exports from the Republic of Korea, average for 1995-1997, by major markets

5.6 Imports

Seafood imports into the Republic of Korea in general increased during the 1990s, with a peak in 1996-1997. In 1998, there was a substantial decrease, probably due to the general economic problems in Asia at that time. Korea’s imports comprise a number of different products, the main items being frozen redfish, bass and conger, followed by frozen liver and roes, other frozen fish meat and frozen mackerel. The biggest increase in quantity terms has come from frozen fish fillets (including mackerel). Other big increases came from imports of shrimps and prawns, salmon and other high value species, implying a change due more to increased domestic spending power than to trade liberalization. The largest decrease was in imports of fishmeal and oils.

Figure 18. Total seafood imports by the Republic of Korea, 1990-1998

5.6.1 Trade partners

Korea’s main suppliers were Russia, China and USA, supplying over 60% of the total quantity imported in 1995-97, with Thailand, Argentina, Japan, New Zealand and the Philippines also significant sources.

Figure 19. Seafood imports by the Republic of Korea, average 1995-97, by major suppliers

5.7 Trade by commodity group

5.7.1 Exports

Korea’s main export commodity is fresh, chilled and frozen fish, with an increasing trend. However, although the quantity of exports has been increasing, the value has been decreasing. It seems that Korea is receiving less, both for crustaceans and molluscs, as well as fresh and frozen fish.

5.7.2 Imports

As mentioned earlier, Korean imports grew all through the decade, until 1998, when the Asian economic crisis had an impact also on the fish industry. Korea has mostly imported fresh and frozen products, and began to import some prepared crustaceans and molluscs in 1993. This commodity group grew slowly, but almost disappeared in 1998.

Figure 20. Overview of the Republic of Korea’s imports of seafood products, by commodity, 1990-1998

Korea import commodity groups 1990 - 1998 - a

Korea import commodity groups 1990 - 1998 - b

Import Quantity

1990

1991

1992

1993

1994

1995

1996

1997

1998

Crustaceans & Molluscs, fresh, chilled, etc...

39195

61890

62203

59691

82124

62318

84823

85902

62407

Crustaceans & Molluscs, Products & Preparations

849

3706

4302

6125

9075

19606

39217

41995

10038

Fish Products and Preparation

94

54

476

1326

730

526

520

826

1298

Fish, dried, salted or smoked

587

52

126

253

571

1091

1371

1529

1310

Fish, fresh, chilled or frozen

180938

228419

204051

242692

232156

261265

329561

325392

254871

Meals, Solubles, etc...

35399

40673

27828

30934

38860

44234

46112

42494

24804

Oils and Fats

25113

23846

20184

10674

12107

18280

14339

10329

5734

Import Value

1990

1991

1992

1993

1994

1995

1996

1997

1998

Crustaceans & Molluscs, fresh, chilled, etc...

85198

116558

105640

105076

190157

183597

251757

235108

100266

Crustaceans & Molluscs, Products & Preparations

3340

14676

19638

34999

49584

84941

122999

115815

33834

Fish Products and Preparation

665

402

1658

5481

5294

5577

5586

7816

7173

Fish, dried, salted or smoked

825

518

1073

2059

4146

4816

10860

9169

6162

Fish, fresh, chilled or frozen

248101

396713

340231

360340

431797

505269

614248

610142

389915

Meals, Solubles, etc...

17193

24393

18268

18119

22123

26536

32920

29632

18940

Oils and Fats

9416

14969

11528

11272

15350

14081

15725

10191

5918

Figure 21. Overview of the Republic of Korea’s exports of seafood products, by commodity, 1990-1998

Korea export commodity groups 1990 - 1998 - a

Korea export commodity groups 1990 - 1998 - b

Export Quantity

1990

1991

1992

1993

1994

1995

1996

1997

1998

Crustaceans & Molluscs, fresh, chilled, etc...

68669

61154

54152

43360

43154

93014

90110

177559

151940

Crustaceans & Molluscs, Products & Preparations

18486

17465

16272

19574

16504

15287

15095

10102

14446

Fish Products and Preparation

52099

41769

36943

38323

47863

51198

62668

67617

62335

Fish, dried, salted or smoked

4015

3242

2688

2955

2177

1780

1787

2088

2116

Fish, fresh, chilled or frozen

265086

310547

282499

215054

198989

219570

226622

192741

303065

Meals, Solubles, etc...

4996

22606

11401

14475

16033

21979

24211

23505

24636

Oils and Fats

3

379

402

698

1030

2529

1762

1673

2697

Export value

1990

1991

1992

1993

1994

1995

1996

1997

1998

Crustaceans & Molluscs, fresh, chilled, etc...

366003

410705

372868

327849

327240

398887

372490

352842

332280

Crustaceans & Molluscs, Products & Preparations

116481

137679

122903

176716

160445

148735

142434

123095

82002

Fish Products and Preparation

188399

168724

171619

167425

201862

246369

274437

251503

205023

Fish, dried, salted or smoked

29447

21566

17107

17244

13458

11245

10339

10828

9525

Fish, fresh, chilled or frozen

657282

745426

665404

635024

696233

744454

693552

622944

602129

Meals, Solubles, etc...

3617

5775

7874

9526

10001

12955

14443

13896

13254

Oils and Fats

2

252

368

423

694

1735

1367

1044

1645


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