already showing signs of improvement. the volume of us trade has increased sharply since it concluded the nafta with canada and mexico in 1994. trade scale to canada & mexico 1988 ~ 1993 1995 ~ 2000 ( annual average amount, billion usd ) ( annual average increase rate, % ) 7. 9 11. 2 first of all, with greater accessibility to the korean market, there are increasing opportunities for industries with a comparative advantage, such as the service industry. in terms of production, the us will be able to secure a new supply line as it becomes possible to purchase high - quality korean parts and components. moreover, the us and the european companies can use korea as a base for advancing into other east asian countries as korea trades on a large scale with china *, which has emerged as one of the g2 in the global economy. in terms of trade scale in 2011, china is korea ’ s largest trading partner, and korea is china ’ s third largest trading partner, following the us, and japan. in the long term, i hope the korea - us fta will bring positive effects on growth and employment in both countries through the expansion of exports and fdi and heightened industrial competitiveness. in addition, consumers are expected to benefit from a wider range of choice, and our bilateral relations are likely to be strengthened still further from a political perspective including the security dimension. in the short term, however, difficulties are expected for the industries having a comparative disadvantage in both nations and therefore every effort should be made to encourage the upgrading of their structure while showing consideration for the industrial fields concerned. bis central bankers ’ speeches the korean economy is expected to continue its solid growth, but as the growth rate is anticipated to slow down over the medium to long term, it is vital to be prepared for this situation. even in the face of heightened economic uncertainty at home and abroad, the korean economy is forecast to grow at around 3 1 / 2 % this year, led by domestic demand including facilities investment. export momentum is expected to approach the pre - crisis level in the second half in line with global economic growth. korea ’ s economic outlook source : bank of korea exports momentum source : bank of korea however, downside risks are expected to remain high for some time affected by external risk factors including the inflationary pressure from oil prices and possibility of euro area sovereign debt problem spreading. bis central bankers ’ speeches prospects for economic growth ( yoy, % ) 2012e ) h1 h2 year h1 h

are many other structural problems that we must face. and the proper policy for dealing with such problems is structural reform, although that is not so easy to carry out, due to factors such as the resulting unemployment and conflicts of interest among different social classes. international organizations such as the oecd, as well as academia, have assessed the structural reforms undertaken in many countries until now to have been insufficient. however, in order to sustain our fledgling growth momentums, our structural reforms need to be intensified. and of course, our macroeconomic policies should also support structural reform. i believe that the theme of session 3, “ structural reform and macroeconomic policy, ” will be helpful to policy makers in the government and the central bank. ladies and gentlemen! the world economy stands at a turning point now. it has shown signs of moving away from the long lasting low growth and low inflation seen since the global financial crisis, but we cannot be sure yet that this recovery will continue going forward. it is my sincere hope that this year ’ s very opportune bank of korea conference will serve as a fruitful venue for looking back on the last decade since the global financial crisis, for gaining insights into the next decade before us, and for generating constructive policy ideas. i look forward to this conference being a great success once again. thank you. 2 / 2 bis central bankers'speeches