Korean Products’ Market Share Decline in U.S.

Made-in-Korea products are increasingly losing ground in the American market.

In contrast, market shares of seven other countries including Mexico, whose free trade agreements with the U.S. came into force, are rising steadily.

According to a report titled “Declines in Korean Products’ Market Shares in the U.S. and its Reasons,” released Sunday by the Institute for International Trade at the Korean International Trade Association, Korean-made products’ shares in the U.S. import market rose to 3.14 percent in 2004 from 2.94 percent in 2003. But it declined for three consecutive years: 2.62 percent in 2005, 2.47 in 2006, and 2.43 in 2007.

The items that recorded the largest margins of decline between years 2004 and 2007 were electrical and electronics goods and clothes with 3.98 percent and 3.78 percent, respectively.

Electrical and electronics goods particularly suffered a big loss. Though the overall size of the U.S. import market expanded 0.16 percentage point compared to 2004, the shares of Korean goods have dropped.

The institute attributed the reasons for the setbacks of the Korean goods to the rising price competitiveness of emerging Asian nations such as China, India and Vietnam, and increasing market shares of the nations who sealed FTAs with the U.S.

In case of Mexico, whose FTA with the U.S. took effect last year, its market share in the U.S. edged up by 0.60 percentage point compared to 2005. Singapore, Chile, Morocco, Bahrain, Oman and Israel also saw their market shares rose by small margins over the same period.

“To raise market shares, we should develop value-added technologies to differentiate ourselves from the newly emerging economies. But more importantly, we should ratify the KORUS FTA that is now pending in the National Assembly as soon as possible to make the most of tariff-free trade with the U.S.,” said Kim Byeong-yu, a deputy director of the institute.

changkim@donga.com