Foreign Trade Trends in South Korea

The purpose of this thesis is to analyze the trends in South Korea\u27s foreign trade for the period 1960-1968 in order to indicate some of the problems which have contributed to its balance of payments deficit and to suggest some possible solutions to these problems. This thesis explores (1) various policies of the Korean government to promote exports, and to control imports, (2) the composition of invisible trade, (3) the structure of principal commodities and world markets, both in exports and imports, and (4) problems and recommendations to improve the current position of the balance of payments of the country. Invisible trade has expanded steadily, with a surplus of receipts over payments, while visible trade has shown a deficit. However, exports grew much more rapidly than imports, and this has resulted in narrowing the trade gap, by a ratio of from 1:10 to 1:3 in 1960 and 1968 respectively. Export commodities were much more diversified in 1968 than in 1960. This rapid growth of exports was due to effective policies and the measures utilize by the Korean government to promote exports. The expansion of imports has been attributed to a demand for raw materials for export industries, imports of capital goods for the establishment of import substitution industries, and some essential goods for stabilizing prices. The trade gap is expected to continue until the major import substitution industries are constructed and put into operation. Thereafter, Korea\u27s foreign trade gap can be expected to be improved if exports continue to grow at their present rate while imports stay at their present tempo after the planned projects are completed