Implications: The pandemic and its associated supply chain disruptions have not weakened South Korea’s interest in deepening its relationship with Southeast Asia. Health partnership with Vietnam and Seoul’s new commitments with ASEAN suggest that the country is continuing to cultivate deeper ties in the region. During the pandemic, challenges with procuring industrial inputs had elevated calls for South Korea to re-shore some of its production. But this does not seem to have impacted Korea’s goal of shifting its manufacturing operations from China to countries like Vietnam. Moreover, Southeast Asian markets continue to show consistent interest and demand for Korean goods: trade between Southeast Asian countries and Korea stands at USD 1.42 billion. As a region, it represents Korea’s second most valuable commercial partner.
Context: Korea adopted the “New Southern Policy” in 2017 which aimed to form deeper diplomatic and economic ties with Southeast Asia as a hedge against uncertainties in relations with the United States and China. This was partly a response to Beijing’s economic retaliation against Seoul’s installation of a U.S.-operated anti-ballistic missile system in 2016. In addition, President Trump’s threat to cancel the Korea-U.S. Free Trade Agreement and escalating trade tensions between the United States and China further strengthened the pursuit of deeper ties with Southeast Asia.
This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.
Korea View was edited by Yong Kwon with the help of Janet Hong and Yubin Huh. Picture from Ministerie van Buitenlandse Zaken