February 3, 2000 
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| February 3, 2000 | atimes.com | |
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| The Koreas Dependence on Japan ends Korea's trade surplus By Kim Hyung-geun SEOUL - South Korea posted a trade deficit in January after recording surpluses for 26 months. But for Japan, however, the nation's trade account is quite a different picture. The nation's trade deficit last month amounted to $400 million, which would have been a plus or balance if not for the harsh deficit with Japan, which finished $553 million in the red for Korea between January 1 and 20. The deficit with Japan has long been a chronic problem in the trade account. The nation has yet to post a surplus in trading with Japan. From 1960 to last year, the accumulated trade deficit with Japan topped $150 billion and is growing. Between January and November last year, exports of semiconductors to Japan were worth $1.69 billion but imports were worth $3.19 billion, or nearly twice the value of exports. Semiconductors are looked on as the engine for the Korean electronics industry, but crucial components of semiconductors are imported from Japan. Production facilities of TFT-LCDs, another major export item competing with Japan abroad, are also imported from Japan. ''The more state-of-the-art items the nation produces, the more dependent it becomes on Japan and that is the current state of the nation's electronics industry,'' sources said. With technology and crucial components dependent on Japan, a strong Japanese yen boosts costs and undermines profits of Korean businesses. Some conventional barriers against Japanese products no longer exist. The nation's trade policy to find substitutes to Japanese products was scrapped last year. The economy can break out of its dependence on Japan by fostering domestic component industries in the form of research and investment in light of the nation's outdated technology. According to an analysis last year by the Korea Economic Research Institute, the nation's component industries lagged more than six years behind Japan. ''For now, it is crucial for local businesses to find means to co-operate with Japanese counterparts,'' sources said. ''Luring Japanese component manufacturers that left the nation in the 1980s back again is one means.'' (Asia Pulse/Yonhap) | |||||||||
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