Freight Transport Activities In Korea Economics Essay

The Korean Peninsula has been divided into North Korea and the democracy of South Korea after the release from Nipponese business of 30 old ages. After the division, North Korea followed the path towards communism where deficiency of development and economic system has resulted into the present calamity of poorness and isolation from the planetary status.AUnlike North Korea, South Korea built up its foundation from its early old ages following the modern democratic universe and has proved to be one of the fastest turning states on the planetary map. Besides the accomplishment in the Fieldss of faculty members the state made tremendous attempts and betterment within the conveyance substructure and during last few decennaries the consequences have been really sound, assisting the cogwheel up the Korean economic system and planetary position along with the trading tendencies and its impact overall on the country.

AIn this essay, we will be exemplifying tendencies of trading in democracy of Korea, logistic substructure, and Korea ‘s function as a logistics hub in located in the centre of Northeast Asia and way of development.

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Background ( about Korea-general thought )

Democratic Republic authorities was established after the war but economic state of affairs was manner below to cover even the basic necessities of the state and state had to trust on USA and remainder of universe. In these fortunes, construct of the trade was foremost introduced but the systematic policy of authorities and disposal was deficient. Coupled with the political affairs, the state of affairs was complicated but authorities felt the demand to implement trade direction and ab initio merchandise act was enacted in 1957, December.

The period of 1960s can be evaluated as ‘maintenance period of trade direction ‘ to promote exports and trade and debut of broad scope of policies and establishments to pull off the income. The decennary of 1970s can be evaluated as ‘trade direction of the fuser ‘ during which assorted establishments and policies to pull off imports and promote exports were undertaken. The 1980s was characterized by the strengthening and promotion of trade direction policy period. In the 1990s, it is a period during which internationalisation of trade direction system and advanced planning progressed. In the 2000s, the construction developed with opening planetary market due to the diffusion of engineering and the enlargement of the motion of capital, the growing of trade and development. Particularly, trade within the part has skyrocketed as FTA to enable regional economic integrating. On the other manus, state is emerging as ‘world ‘s mill ‘ and a high economic growing rate in exports against China based on geographic propinquity and engineering has become active in trade with China. Since WTO launched, every bit good as free trade, just trade emphasized, democracy of Korea has focused on spread outing the institutional base and the enlargement of trade within the bound which does non go against WTO norms.

Key tendency in international trade since 2000

External background

During 2000, the international trade environment underwent a monolithic alteration. Free trade appeared on the chief watercourse with WTO as Centre but in the other manus, developed states such as USA showed dissatisfaction with the tendency as they believed it will do trade instability. There was a inclination to damage both development and developed states ‘ regulative steps to protect domestic industry.AIn add-on to this, significantly increased regionalism deepened free trade understanding ( FTA ) , including regional trade understanding ( RTA ) worldwide.




In past yearss, Korean trade policy was to a great extent dependent on exports, nevertheless since the WTO came into being free trade and just trade are emphasized and direct monetary value policy has become virtually impossible. Therefore to get the better of this in 2000, the Korean trade support establishments moved into the way of enlargement based on institutional system such as export finance support, bossa abroad markets and abroad selling support, Internet selling support, Internet selling support, supply information, and export confer withing support, design support and trade instruction system. Among International trade dealingss with the development of the many-sided trading system in the 2000s, most singular phenomenon has said to be the spread of regionalism.

Due to international trade, investing barriers and rapid development of information, the significance of boundary line became fade. Economic blocks have been created to portion the economic benefits between the states geographically nearer. As mentioned above, Korean economic system until now was mostly dependent on exports but lately Korean authorities began to demo an involvement in regionalism because if they have realised the benefits of maintaining regional trade alive.AFig 1. South Korea ‘s foreign dependance on exports( OECD, China Customer series cited in Munhwa Daily, 2012 )

Free Trade Agreement ( FTA )

External economic systems of graduated table history for more than 70 % of the gross domestic merchandise ( GDP ) in South Korea which has an export-oriented economic construction. If Major trading spouses and other states signed FTA foremost, the concerns that own goods can be hapless monetary value fight due to high duties to bit by bit lose market, in 2000s, the Korean authorities started doing attempts to reason the FTA.

The Korea Free Trade Agreement started paying attending since the mid-1990s, but formal trade dialogues began after the fiscal crisis in 1997 when duties were eliminated in the formation of a imposts brotherhood through the FTA, Conventional merchandises under duty protection was produced while the high cost of production is reduced, inexpensive goods imported from other states to be able to acquire the consequence of making new trade. Examples of these trade creative activity consequence, the confederation signed before the Korea-Chile FTA, trade between the two states since the 4.6-fold addition.

( Haeree, 2012 )Fig 2. Trade in graph comparings before and after one to seven FTA confederation( The Korea International Trade Association cited in Ministry of Land, Transport and Maritime Affairs, 2011 )South Korea FTA signed with several states because of these economic effects and is besides negociating for a new FTA.An FTA Status ( Effected pacts )Korea-Chile, Korea – Singapore, South Korea-ETA, Korea-ASEAN, South Korea – India, South Korea-EU, South Korea – United States, South Korea – Peru, South Korea-Colombia, and South Korea – TurkeyBing negotiated FTAKorea and China / Korea-GCC / New Zealand – New Zealand / United States-Mexico / Korea – Dutch east indies / Korea – Vietnam / Canada / Korea – Australia

INFRASTRUCTURE of international trade and conveyance activity


HighwayThe route web of the Korea is divided into expressway and national main road. Total of 86,000 kilometers of route length, except for rural route, metropolis street, 14,000 kilometer of expressway and 3,400 kilometer of national main road base on balls through each of the major metropoliss and has contributed to both rider transit and cargo transit. Between North and South instead than east-west route associating length is more evolved and between Seoul and Busan Gyeongbu Expressway is a premier illustration. This expressway has bound as a one twenty-four hours driving with avoiding the duplicate of bing route and railroads and Youngna industrial country, Incheon port and Busan ‘s 2nd largest export port that connects the aorta.

Fig 3. Highway map of south KoreaHighway Map of Korea – South Korea ( practical tourer, 2011 )Inland logistics bases = Integrated freight Terminal ( IFT ) + Inland Container Depot ( ICD )Facilities are equipped with the characteristics that are required for the aggregation system, lading and droping lading, categorization, packaging, storage, or clearance and it means the graduated table and logistics terminal equipped with agencies of conveyance between two or more roads, railroads, etc. that can be linked to transport.

( Law on the Development and Operation of Logistics Facilities Article 2, Paragraph 2 ) Korea suffer from the congestion phenomena congestion of airdromes, havens, path of main roads in the early 1990s, domestic and international import and export volumes increased due to economic growing, authorities was constructed on the logistics of the transit system associating the major locations nationally in order to basically work out the jobs.Fig 4. Inland logistics bases( CJ Korea Composite Logistics, 2011 )RailingX-shaped cervix, Hunan, award, dwelling of Gyeongwon Jeolla chief railroad rail system and light wires was built by the Japanese in 1899-1920.

As the 1990s passed electrification of the railroad was in advancement and metropolitan broad country railroad web expanded, and the localisation of the development of the railroad vehicle was launched in earnest.Fig 5. . Railway lading container transit volume( Korea Railroad Corporation cited in Ministry of Land, Transport and Maritime Affairs, 2012 )PortThe lading volume handled at the port in 2011 500000000 6150 million TEU, showed year-over-year growing of 8.4 % and 58 % of the universe ‘s 30 largest ports in the 300 000 000 2,4000 TEU handled.

Multi-National Group and International transportation company extend their concern available in each state in order to run into the demands of our clients in international communicating port and airdrome. South Korea develops five airdromes and 10 ports in order to pull these international companies for international distribution. In peculiar, Korea is expected to execute the function as a logistics hub between China and Japan called the universe ‘s mill is located in the bosom of winter vesture – logistics and distribution geographically connected.Port of BusanBusan port seaport as the national power and raising is container throughput in 2011 sums to 16.18 million TEU in maintaining with the universes fifth largest and the universe ‘s 2nd largest container transshipment volumes handled seaport named. ( Changho, 2012 ) Geographical advantage that is next to China and Japan, in add-on to Busan Port, the universe ‘s largest giant berthing installations. 30 berths container pier, seaport and backwoods 324 square followed by Singapore, South Korea Free Economic Zone was designated as a topographic point to Japan ‘s Mitsu Traiding, in the Netherlands C.

Steinweg, Hong Kong ‘s Kerry Logistics, the universe ‘s taking transportation companies have already set up their logistics concern.Fig 7. Container throughput of the universe ports Fig 8. Busan port container throughput flow tendency( Ministry of Land, Transport and Maritime Affairs ( MLTN ) , 2009, p.24 )


Due to the altering tendencies in international trading, Korea needs to concentrate on ongoing challenges every bit good the approaching effects and challenges in following twosome of decennaries.

To place the challenges and chances we need to look into the bing trading construction in the state and see will go on if the state maintains its current velocity of linking with the universe exterior. To summaries the challenges we can categorise as follows.1. Relationship between conveyance related international trade and accepting planetary economic construction ( Free Trade Agreement, Free Economic Zone2. Foreign investing3. Balance between import and export4. Price control5. Fuel use as the chief demand for transit and trade6.

Procuring local occupationsOne of the most talked approximately related to transport substructure and its consequences in the signifier of unfastened markets is the challenges which the county may confront on coming decennaries.The chief statements originate from less competitory industries, such as agriculture ( farm animal, dairy etc. ) who feel that they will be hurt by the procedure of altering trade tendencies which was in past limited to national degree but now with the promotion of transit industry the international trade has become reasonably much a portion of regular concern.Additionally, some employed in the service sector, such as in jurisprudence, distribution, funding, besides believe that they will acquire ache a batch when international houses penetrate into Korea ‘s comparatively closed markets. They believe that as a consequence of this altering tendencies in Korean markets, many Koreans will lose their occupations and will be focused to hold a lower criterion of loving ; the consequence will be ‘the rich-get-richer and the hapless -get-poorer ‘ .


OPPORTUNITIES FOR TRANSPORT RELATED INTERNATIONAL Trade IN NEXT 20 Old agesAs Korea has shown rapid alteration in its transit substructure with in last 20 old ages or so and maintaining that advancement in head we can foretell that the go oning alteration means more and better chances on its manner both for Korean economic system every bit good as its citizens.OPPORTUNITIES FOR GOVERNMENTKorea is geographically a little state and without international trade the chances to turn the economic system will be limited which means a dead economic system after a certain period of clip but by utilizing the international trade it can non merely continually rush up the growing rate but besides provide immense figure of occupations to its people in the conveyance sector used for international trading. This is the right minute for the authorities to present Korean market to the universe by utilizing its fastest turning conveyance paths.

OPPORTUNITIES FOR CITIZENSWith the current position of conveyance substructure, we can likely foretell that in following twosome of decennaries Korea will be a state where urban and rural countries are better connected and this will supply chances to the people in rural countries to transpose freely with in the state and take portion in international trading by utilizing the potentially legion more new conveyance hubs used for merchandising all across the state.OPPORTUNITIES FOR BUSINESSES/COMPANIES/PRIVATE SECTORWith the betterment in conveyance substructure, Korean concerns and private sector has shown their monolithic function in the trade and growing. We have illustrations of SAMSUNG, HYUNDAI AND LG which have managed to rule the planetary market by utilizing an efficient system of Korean international trade by agencies of of all time turning transport substructure. With this current rate, we can foretell the function of private sector being more evolved which will supply more industries in the different parts of state supplying more occupations for the people and increased the exports of merchandises in Korean economic system.


In South Korea, international trade has flourished late chiefly due to extensively powerful transport substructure.

It is one of the most of import beginnings of gross in South Korea.ANow with the debut of new techniques in trade, extremely developed transit system & A ; corporation, outsourcing of fabrication has been possible utilizing the conveyance industry both regional and international and South Korea can use this advantage for the growing and spread of international trade system.AThe political, societal & A ; economic significance of international trade has proved that the stairss taken by Korea in last few decennaries to overhaul the trading system were right and are indispensable for to be portion of the globalisation. In the absence of an organized conveyance substructure, the state would be restricted to a limited growing of the services and goods manufactured within its districts and the state would lose out on valuable gross from international trade.ATransport related international trade has been the major driver of growing in Korea for the last 30 old ages and have become comfortable and a portion of planetary powerful economic system.

It has contributed enormously on the decrease of poorness as well.ADavid Ricardo is an economic expert explained that how an organized international trade can profit a concatenation of parties like single, companies and countries/governments every bit long as goods are produced at different comparative cost and this principal is merely effectual when the state has an effectual logistics and trade construction which enable it to be portion of international trade. This is considered as most of import construct in international trade and Korea as a state has efficaciously adapted the country.AAnother economic expert, Adam Smith emphasized that to increase the growing a state needs better connexion with the local, regional and planetary markets which means the production volume can be higher with ensuing reduced cost. Korea has besides achieved this theoretical account where it ‘s merchandising it ‘s manufactured merchandises to a huge graduated table and this has been possible largely due the conveyance substructure development.AWhat we have discussed on the essay, some of import cardinal advantages of international trade can be organized asA1. It has enhanced domestic fight2.

Addition in gross revenues and profitsA3. A decreased dependance towards bing market.A4.

Able to portion planetary market gains.A5. International trade can assist stabilise seasonal market fluctuationABut on the other manus Korea must be cautious when it comes to utilizing international trade unfastened. The chief key points which the state still needs to concentrate on are1. Excessively much influence of foreign markets2. Fighting Domestic manufacturers because of price/cost competitionA3.

Sensitive domestic industries like farming at a hazard of shutting downA4. Possible hazard of losing occupations within domestic little businesses.A5. An instability of import/export which can ensue in state being less exporting than importing which seemingly is damaging for the growing in future.A


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