Boycott against Japan makes no impact on drug sector

Accumulated deficit as of Oct. USD 132.3 billion, lowest since 3 years ago

But drug import increased by 57% in 6 years, boycott ineffective

Although this year’s deficit generated from trade with Japan is expected to hit the lowest point, the pharmaceutical sector has not been affected on a notable level.

 

For last six years, Japanese drug import volume skyrocketed by around 57 percent.

 

The import volume easily overwhelmed the Korean export volume, resulting in inevitable heavy deficit.

 

In general, Korean boycott movement against Japanese goods, started spreading since June, seems not to have affected Japanese drug as much.

 

According to Ministry of Trade, Industry and Energy (MOTIE) and Korea Customs Service (KCS) on Nov.

 

18, South Korea’s total trade deficit with Japan from January to October this year was USD 16.37 billion, which has gone down by 20.6 percent than same time last year at 20.61 billion dollars.

 

As far as total deficit made from January to October goes, this year’s deficit has been the least ever since 2003 with 15.57 billion dollars.

 

If the trend continues until the end of the year, Korea’s total deficit with Japan would be under 20 billion dollars for the first time in 16 years.

 

It would be about the half of highest volume marked in 2010 at 36.12 billion dollars.

 

However, the pharmaceutical sector seems to be an exception to the trend.

 

Until last October, Korea marked trade deficit with Japanese pharmaceutical products of 132.3 million dollars.

 

Deficit from January to October has hit the lowest figure since three years ago in 2016 (deficit of 120.63 million dollars).

 

But considering average deficit in five years from 2014 to 2018 (accumulated from January to October) was around 95.71 million dollars, this year’s improvement on deficit is hardly remarkable.

 

In the same time, Korea’s export volume to Japan has surged by 51.6 percent from 127.69 million dollars to 197.83 million dollars, but the import volume also surged by 56.6 percent from 185 million dollars to 330.13 million dollars.

 

The increase in import rose over the increase in export, generating the total net deficit as a result.

 

Jan.

 

to Oct.

 

drug trade trend by year (unit: USD 1,000).

 

Red shows this year’s trade volume.

 

Figure improved the most since last 3 years (2017-2019) but still deficit reached higher than before.

Even when the boycott movement took off July, the changes of pharmaceutical import and export volume by month did not leave a notable change in trend.

 

As for July, Korea made a deficit of 22.19 million dollars.

 

The country exported 23.97 million dollars of pharmaceutical products and imported 46.16 million dollar-worth of goods.

 

July had the heaviest deficit of the year.

 

The deficit was lowered to 5.56 million dollars in August, but it is getting larger again after generating 10.11 million dollars and 14.57 million dollars of deficit in September and October, respectively.

 

Analyzing last three years of monthly trade deficit, the boycott movement did not make a clear mark on the graph.

 

The result is quite contrasting from major consumer goods, such as automobile, apparel, alcohol beverages and electronics that got struck by the boycott against Japanese goods.

 

Drug trade volume trend by month in last 3 years (unit: USD 1,000) Red shows trade volume in July-Oct.

 

after boycott, but no special tendency found