`Cool Britannia' lifts exports to South Korea

British exports to South Korea leapt by 25 per cent last year, according to the latest figures compiled in Seoul. But the good news is mixed with concern that a campaign against imports of luxury Western goods is hitting British trade.

Britain exported $2.9bn (pounds 1.8bn) worth of goods to South Korea last year, up from $2.4bn the year before. It is gaining market share over other EU countries: though Germany and Italy both export more ($7.2bn and $3.1bn respectively), Britain's increase in exports is far greater than the average EU increase of 17 per cent. Britain is the seventh-largest exporter to Korea, behind the US, Japan, China, Germany, Australia and Italy. Britain imported $3.2bn worth of goods from Korea in 1996, leaving a small and shrinking trade deficit.

South Korea, one of the most dynamic economies in East Asia, is a leading target for exporters around the world. It has recently gained entry to the Organisation for Economic Co-operation and Development, and has an average growth rate of about 8 per cent per annum, though growth slowed last year.

British business and government have put considerable time and effort into promoting trade and investment relations with Korea, and the evidence is that this is paying off. The biggest growth in exports in the past year has been in machinery - printing machinery, machine tools, engineering components - electrical machinery and aerospace goods. This year, Britain is hoping to capitalise on its strengths in the Korean market through a series of trade shows, visits and exhibitions linked to the bicentenary of the first Briton to arrive in Korea.

One of the key aims is to shift the perception of Britain from the traditional idea of a nation steeped in history but ill-suited to produce modern goods, and to promote a kind of "Cool Britannia" image of a country which is modern, technologically skilled and fashionable. Among the companies to promote their goods will be Paul Smith, the leading men's clothes designer.

But something of a shadow has been cast over trade relations by a strenuous campaign in Korea against luxury Western goods. The Korean government has become concerned by the rise in the country's trade deficit, which it blames partly on the taste of the nation's wealthy for the trappings of the Western good life. British officials and businessmen say that this is translating into administrative restrictions on imports. The Korean government rejects this, saying that no official action has been taken.

British officials claim there is tax discrimination against whisky imports in favour of local spirits. But there have also been protest rallies against Western spirits, and British officials say Korean officials are impeding the import of whisky through extra paperwork and customs checks. Similar problems afflict exports of silk ties and cosmetics.