This is the second in a series of blogs looking at South Korea’s foreign relations in the run up to the next Korean administration taking office on May 10. The series also includes blogs on relations with North Korea, the United States, China, Japan, the European Union, Russia, the Middle East, Latin America, and Africa.
By Patrick Niceforo
Since establishing a Sectoral Dialogue Partnership with the Association of Southeast Asian Nations (ASEAN) in 1989, South Korea has rapidly expanded its diplomatic ties, economic partnerships, and development assistance efforts in Southeast Asia. In that time, trade between South Korea and ASEAN has expanded from $26.8 billion to $118.8 billion. As ASEAN continues to develop economically, the next South Korean administration will look to build on the success of prior administrations in growing economic ties with this increasingly vibrant region.
South Korea’s diplomatic relationship with ASEAN extends beyond its bilateral relationship with the ASEAN member states. Since 2012, South Korea has maintained an Embassy in Indonesia specifically for ROK-ASEAN relations. The establishment of the ROK-ASEAN Embassy was consistent with former President Lee Myung-bak’s “New Asia Initiative,” which called for increased levels of official development assistance (ODA), expanded trade networks, and multilateral cooperation on global issues such as climate change and disaster management. In addition to having bilateral FTAs with Vietnam, Indonesia, and Singapore, South Korea is also signatory to a Free Trade Area (AKFTA) with all of ASEAN which helps to facilitate and expand economic, trade, and investment cooperation in the region. South Korea has also gradually stepped up its ODA to Southeast Asia over the years.In 2015, about one quarter of South Korea’s overall $1.9 billion in ODA went to Southeast Asia, more than twice what it provided to the region in 2010.
South Korea can look forward to developing its role in regional trade through the ASEAN-driven Regional Comprehensive Economic Partnership (RCEP). RCEP is an agreement that, in addition to ASEAN member states, includes South Korea, China, Japan, India, New Zealand, and Australia. With negotiations launched in 2012, RCEP covers areas such as trade in goods and services, foreign investment, and dispute settlement. As the next South Korean administration comes to office it will need to prioritize RCEP and its negotiation strategy, as the deal could be signed as early as mid-2017.
A potential opportunity for South Korea is attracting more international tourism from Southeast Asia. The number of Chinese tourists in South Korea has plummeted as a direct result of THAAD, with a 40 percent drop in March. This is concerning given that China contributes nearly half of South Korea’s foreign visitors. According to the LG Economic Research Institute, Chinese tourists spent $13.7 billion in South Korea in 2015, over 62 percent of its foreign tourism revenue. However, because ASEAN and South Korea jointly designated 2017 as the ASEAN-ROK Cultural Exchange Year, there are already plans to increase youth exchange programs and foreign investment. South Korea could capitalize on these programs to develop and expand sustainable tourism with its ASEAN partners. Generally speaking, larger numbers of tourists from ASEAN member countries have been traveling to South Korea over time. While Southeast Asian tourists are unlikely to replace the depleted numbers of Chinese tourists in South Korea, increased tourism could at least help alleviate the problem while also contributing to South Korea’s overall mission of expanding cultural exchange.
Patrick Niceforo is a graduate student at the Middlebury Institute of International Studies and an intern at KEI. The views expressed here are the authors’ alone.
Photo from Nicolas Mirguet’s photostream on flickr Creative Commons.