[Editorial] Loss in `Semiconductor`, Block in Steel Exports

While people`s eyes and ears are centering on the muddy fight in the political circle, our economic situation is deteriorating day after day. Samsung Electronics, one of the leading companies in the nation, marked a large-scale loss, and the steel exports are facing the risk of being banned as the U.S. ruled that they have caused direct damage to the American steel industry. Our economy is unstable.

Samsung Electronics could not be an exception in the midst of slump in the semiconductor market in the world. The fact that Samsung Electronics did not strategically reduce the production was one of the causes that worsened the profit. However, it is shocking that Samsung Electronics marked operational losses of 380 billion won in its leading semiconductor operations in the third quarter of the year. If we recall the foreign currency exchange crisis, the outlook of the current situation is not positive. For instance, right before the foreign currency exchange crisis, we were elated with the boom of semiconductor. However, when the balance of payments marked the loss due to the sudden slump in exports, our economy began to deteriorate.

The government, bearing this lesson in mind, has repeatedly emphasized that it would relatively lower the dependence on semiconductor by diversifying the items of exports. However, it is unknown as to what the government has been doing and what it has achieved. It is not a coincidence that exports have been reduced for nine months when officials of the Ministry of Commerce, Industry and Energy complain that it is hard to see the Minister`s face due to the increased schedule for the external works since the inauguration of the political minister.

Steel exports are in trouble as well. Although the U.S. International Trade Commission (ITC)`s rule against foreign steel exporters for their direct harm to the American steel industry arose from the slump in the related industries within the U.S., it is unsettling. With our government`s counter-measure alone, the outlook is negative, though more procedural processes remain.

We were disgraced by the South Korea-China dispute over garlic. More disputes over trade in the areas of car and ship exports are waiting, including an on-going issue of Hynix Semiconductor. However, the trade and negotiation headquarters does not seem to have played its role properly. Although it is problematic that the expertise of the trade and negotiation headquarters has been weakened since the competent officials, who were involved from the beginning, had to leave whenever there were new personnel managements, authoritative way of dealing with the business by the trade and negotiation headquarters, which did not lead the cooperative mood with the related ministries, are subject to criticism.

As long as the Ministry of Foreign Affairs and Trade, which has to maintain political amity with foreign countries, co-exists with a deformed government organization that manages trade business aiming at achieving economic benefits through negotiation and struggle, the second and the third trade disputes are predicted. The establishment of the trade and negotiation headquarters within the Ministry of Foreign Affairs and Trade will be recorded as one of the biggest mistakes of the `people`s government`.

We urge the government to promptly take more realistic counter-measures along with the reexamination of the export related ministries.