Korean Policies for Sustainable Trade Growth

- Facilitating Trade for SMEs -

Oct 2012

Korea Paperless Trade Office , KITA

Korean Economy &Global Network

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Policies for Sustainable Trade

Growth

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Policies for Fostering Trade Industry K I T A

ExpandingFTA global

network

Facilitate accessing new

Market

Advanced trade

infrastructure

FDI-friendly policies &

Environment

§ Enforcing marketing strategies for emerging market

§ Expanding information and infra to access new emerging market

§ Reinforce support to companies to maximize the earning of FTA

§ Build strategic FTA plans with promising countries

§ Improve the system of Foreign Investment

§ Intensify efforts to attract strategic investments

§ Develop Free Economic Zone

§ Extent trade financing and ex/import insurance

§ Foster international conventions in Korea

§ Activate e-Trade based on the Internet

§ Encourage major and small

businesses to expand overseas collaboratively

Starting tradebusiness

Starting tradebusiness

Contract and ExportContract and Export

OverseasmarketingOverseasmarketing

1st1st

2nd2nd

3rd3rd

Service Road Map to Support Trading Companies K I T A

- Selecting export items- Giving a trade registration number- Changing a business license - Educating how to start trade business

- Superior product exhibition- International trade show- Trade mission- Internet Global matching service- Overseas market research- Credit inquiry- Producing catalogues/manuals- Translation service

- Filling out documents- Trade consulting- Reviewing the contract- Export clearance and transportation- Export Insurance- Payments for the bills- Tariff refund

- Int’l standard Certification- Funds to develop overseas markets

- International patents- Export packing

- Help to receive uncollected money- Information of overseas companies

Extra supportsExtra supports

Relevant Int’l Service Agency for Export K I T A

- KITA

- KOTRA

- Association established by respective industries

- Local Government

- Association established by Local Government

- KITA

- KOTRA

- Association established by respective industries

- Local Government

- Association established by Local Government

Before Contract

(Marketing)

Before Contract

(Marketing)

- Paperless Trade (KTNET)

- Cargo Clearances (Customs)

- Freight (Shipping, Transport)

- Export Insurance (K-sure)

- Payment (Banks)

- Export Inspection

- Credit Inquiry Agency

- Paperless Trade (KTNET)

- Cargo Clearances (Customs)

- Freight (Shipping, Transport)

- Export Insurance (K-sure)

- Payment (Banks)

- Export Inspection

- Credit Inquiry Agency

After Contract

After Contract

What is KITA?

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Introduction of KITA

Supporting domestic companies to expand their business on a global scale

Fostering partnerships between domestic and overseas enterprises

Foundation Established in 1946

Status Korea’s largest and most influential business association with 65,000 members

Goals

Homepage www.kita.org

View of the World Trade Center Seoul

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KITA’s Main Activities

1. Opening Doors For Foreign Traders & Investorsl Marketing through KITA’s e-Marketplace, tradeKorea (www.tradeKorea.com)l Networking with foreign traders & investorsl Hosting exhibitions & conventions

2. Improving the Trade Environment3. Building u-TradeHub for Paperless Trade4. Researching the Global Economy &

Training Trade Experts5. Developing an Advanced Logistics Industry6. Operating the World Trade Center Seoul since 1988

Major exhibitions hosted by KITA

SPOEX (Sports & Leisure) | www.spoex.com

Jewel Fair Korea | www.jewelfair.com

World IT Show | www.wisexpo.co.kr

BIO Korea | www.biokorea.org

Marine Week | www.marineweek.org

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OFFICE SPACE : Trade Tower, ASEM Tower, CALT Tower BUSINESS FACILITIES : COEX Convention Facilities, COEX Exhibition HallsTRANSPORTATION : CALT (City Airport, Logis & Travel)LODGING : Grand & COEX InterContinental Hotel, Oakwood Premier COEX Center SHOPPING : COEX Mall, Hyundai Department Store LEISURE : COEX Artium Performance Center, Movie Theater, Aquarium, Seven Luck Casino

KITA’s Global e-Marketplace for SMEs-tradeKorea.com

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Paradigm Shift in International Trade

Transport-ation

Transport-ationSettlementSettlementShipmentShipmentContractContract

Customs ClearanceCustoms

ClearanceMarketingMarketing

Procedure of International Trade

NegotiationBiz MatchingSearchPromotion

- e-Catalog- Trade Leads

- Products- Companies- Trade Info

-In/Out-boundBiz-Matching

- Sending/Receiving Inquiries

Nego. Nego.

• tradeKorea.com is launched on April 8, 2008

• Providing basic tools for online marketing such as posting e-Catalog, sending/receiving inquiries, etc

• Promoting Korean suppliersto foreign buyers

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KITA’s e-marketplace, tradeKorea.com

• In July 2009, newly born tradeKorea.comas a Global e-marketplace

• Offering free services to international players with no restraints

• Providing user-friendly web services

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Global e-marketplace, tradeKorea.com

1. Open to International Playersl Free & simple registration l World-wide promotion to international traders

2. Reliable Database and Trade Information l Extensive database on a variety of products and Korean companies

including KITA’s 65,000 members and overseas Korean companiesl Up-to-date information on domestic and international trade shows l Special cyber exhibitions through cooperation with global e-marketplaces

3. 1:1 Business Matching Servicel Direct online/offline matching service by trade expertsl Help in finding the most reliable and suitable trade partners in Korea

4. User-friendly Web Servicesl Skype video consulting, Google Map, Instant “Trade Alerts” ,

Credit Verification- 6 -

Global e-marketplace, tradeKorea.com

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Screen Shot of tradeKorea.com

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Screen Shot of tradeKorea.com (Cont’d)

Establishing networks with trade promotion agenciesworldwide

tradeKorea.com – Global Biz Network

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tradeKorea.com – Global Biz Network

Connecting suppliers and buyers through cooperation with major global e-marketplaces

§ Joint promotion through banner exchange§ Signed comprehensive cooperation MOU § Multi-posting on tradeKorea.com & Alibaba.com§“Export to China, Export to the World 2009-2010”

§ Test Project of B2C market entry § “B2B e-Trade Mission project § Global e-TA training program

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Paperless Trade inKorea

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export

import

Needs for Paperless Trade

Establishment & Dissemination of Paperless Trading System

v Milestone of Paperless Trade in Korea

vTrade Automation Act(1989)§ For national competitiveness by cutting costs through automated

transaction system

vEstablishment of KTNET(1991)

§ A 100% investment holding subsidiary of KITA§ Implementing IT based projects between public and private sector§ the sole designated system operator for uTradeHub§ a service provider of the national paperless trade system

Computerized Trade Data

EDI service(frame relay)

Online Marketing

Paperless Trading System

Paperless Trade Governance in Korea

Establishment & Dissemination of Paperless Trading System

Concept of uTradeHub

Establishment & Dissemination of Paperless Trading System

Course of ActionsCourse of Actions

Phase2(’06)

• Build a trade portal for tradersè License/Certification/Clearance support system

• Standardize documentsè ebXML based document standardization

Phase1(‘04-’05)

• Build Core Infrastructure of e-Trade Platform

è u-Trade document circulation systemè e-L/C service system

• Establish e-Trade Platform, uTradeHub for all the trade related communities

è Link systems of banks, logistics and many other related organizations

Phase3(’07~ )

Establishment & Dissemination of Paperless Trading System

Digital Signature Act

Trade AutomationAct (1991)

e-Trade Facilitation Act

(2005)

CommercialLaw (2007)

Foreign Trade ActElectronic

Transactions Act

Legal framework

Productivity Increase

Reduction of extra fees

Reduction of redundant investment in the IT sector (318million USD)

Reduction of labor costs (263.3million USD)Reduction of labor costs (263.3million USD)

Reduction of printing costs (19.1million USD) Reduction of printing costs (19.1million USD) Reduction of circulation and storage costs(271.9million USD)Reduction of circulation and storage costs(271.9million USD)

Reduction of warehousing costs (1.36billion USD)Reduction of warehousing costs (1.36billion USD)

Reduction of inventory management costs (750million USD)Reduction of inventory management costs (750million USD)

Productivity increase [554.3million USD] + Reduction of extra fees [2.11billion USD]

+ Reduction of redundant investment in the IT sector [318million USD]

Expected Economic Benefits

e-Nego Pilot Project

Linked Authorities

Trading company

e-I/P

e-C/O

e-L/C

e-Nego

e-B/L

e-Trade Documents Repository

Linked Authorities

Banks

Logistics companies

Insurance companies

RelatedOrganizations

LG ELECTRONICSReduced Labor costs, documents handling charges,etc. by 30mil USD for a year

SAMSUNGELECTRONICS.

Reduced labor for the customs clearance department by 50% : 89 persons → 43 persons

Shortening of working hours and process simplification : 25days → 5days, 53steps → 17steps

INTERFLEX

Reduction of extra fees for trading : 29,000 USD → 9,160 USD

Shortening of the time required : 12hours → 30mins

DAEWOOELECTRONICS.

Shortening of handling hours for shipping requests : 22mins per → 6mins per

Cost saving cases in Paperless TradeCost saving cases in Paperless Trade

Expected Economic Benefits

Thank You

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