Gov't to help smaller firms to tap Japanese markets

SEOUL, Jan. 28 (Yonhap) -- The government said Wednesday that it will help local
small and medium enterprises to make inroads into the Japanese parts and
distribution markets in an effort to cut South Korea's trade deficit with the
world's No. 2 economy.

The plan by the Ministry of Knowledge Economy aims to reduce the ballooning trade
deficit that reached a record US$32.7 billion in 2008, and to take advantage of
the strong yen which makes locally made goods cheaper in Japan.
South Korea's aggregate trade deficit with its neighbor reached $344 billion,
with the Japanese currency appreciating to 1,259.5 yen to the 100 won as of late
2008 from 828.6 yen a year earlier.
"There is room for South Korean products to make inroads into Japan's procurement
sector by taking full advantage of favorable exchange rates," said a ministry
official. He pointed out that Japanese companies have started to outsource
products for local manufacturers.
The chronic trade imbalance is attributed to Seoul's export-driven economy that
imports key parts and materials from its neighbor to make products for export. Of
the total deficit, more than 60 percent was linked to the import of parts and
materials. The closed nature of Japan's retail and distribution system has also
contributed to limiting market presence.
The ministry said it will use the joint parts and materials fair organized by the
Korea Trade-Investment Promotion Agency and the Japan External Trade Organization
in April to help companies link up with potential customers.
The plan, outlined at a meeting of exporters, calls for Seoul's support to help
local companies sell products through on-line shopping malls, like Rakuten Inc.,
and to secure more orders for agricultural produce and processed food that have
lost ground to cheaper Chinese imports in recent years.
The discovery of harmful chemicals in Chinese farm and processed food products
last year, have opened new opportunities for South Korean goods.
In addition, the government will redouble research and development support and
attract Japanese investment in parts and materials.
yonngong@yna.co.kr
(END)