ASEAN has become South Korea’s second largest trading partner, with trade between them increasing by twentyfold over the last 30 years.
According to data from its Ministry of Trade, Industry and Energy and the Korea International Trade Association (KITA), South Korea’s exports to the Asean bloc reached US$80 billion (RM 334 billion) in the first 10 months of the year.
The Korea times reported that South Korea's imports from the Southeast Asian countries reached US$47.4 billion (RM 198 billion) during the same period, indicating that South Korea enjoyed a trade surplus of US$32.6 billion (RM136 billion).
The figures, which were released ahead of the Korea-Asean commemorative summit to be held from today to Wednesday, are significant as the nation’s exports to Asean countries was a mere US$3.9 billion (RM16.2 billion) in 1989, with imports at only US$4.1 billion (RM17.1 billion).
Last year, South Korea’s exports to Asean countries reached US$100 billion (RM417 billion), with the trade surplus hitting US$40 billion (RM167 billion).
Vietnam was the fourth largest export market for South Korea last year, up from 59th in 1989.
A KITA official said that the Asean countries were growing at a fast pace and they were considered as young and dynamic markets for the future.
"To extend trade and investment in Asean, South Korea needs to take an approach that fits the needs of each country and for specific conditions."
To this effect, Korean companies have been shifting their strategies from using the region as a production base to advancing into service sectors and growing local consumption markets.
Senior analyst at Hyundai Research Institute Hong Joon-pyo said companies should refrain from investing only in a few fast-growing countries.
"In 2018, trade with Vietnam accounted for 42.7 per cent of trade between South Korea and the 10 Asean states. Foreign investment was highly concentrated in Vietnam and Singapore," Hong said.
"In order to avoid unexpected economic crisis, companies should diversify the geography of investment."
Experts also agree that South Korea should adopt a two-pronged strategy to strengthen its foothold in the region by pursuing an Asean-wide approach.
It also needs to develop strategies tailored to each country as Asean nations are different in economics, politics and culture.
Meanwhile, the government said it planned to reinforce regional trading blocs and bilateral free trade agreements (FTAs) to enhance cooperation with the region.
Its industry ministry said it would promote bilateral FTAs with countries like Malaysia and the Philippines.
The South Korean government had also concluded a Comprehensive Economic Partnership Agreement (CEPA) with Indonesia in October.
The government also hopes to finalise and sign the Regional Comprehensive Economic Partnership (RCEP) next year.
This economic direction is in line with the government’s New Southern Policy that aims to boost economic ties with Asean to shrug off heavy reliance on China.
It has also set a goal of raising bilateral trade with Asean to US$200 billion (RM834 billion) by next year.
The Korea-Asean Commemorative Summit in Busan celebrates the 30th anniversary of the two sides dialogue relations.
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