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ASEAN AND SOUTH KOREA FTA
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Trade between ASEAN countries and South Korea have expanded 11-fold over the past two decades to $90.2 billion in 2008, and bilateral trade is expected to surge to $150 billion by 2015. ASEAN’s six largest economies, Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam, currently account for 90% of this trade. South Korea’s trade with these six economies have more than tripled since 1999, reported the Korea Times.  The developing nations of ASEAN obviously need the capital, advanced technology, skill sets and financial expertise from Korea. In return, along with cheaper labor and other costs for Korean companies investing in the region, ASEAN can also offer South Korea its expanding marketplace which has the potential to offset decreasing consumer sales prospects in the West.

The free-trade agreement (FTA) South Korea signed with ASEAN for goods in 2006 and for trade in services in 2007 has helped boost trade for both sides. The aim of the FTA is for tariffs to fall to zero for most products by 2010 for South Korea’s trade with Singapore, Thailand, Brunei, Malaysia, Indonesia and Philippines, reported the Bangkok Post newspaper in Thailand.  In August 2009, ASEAN and South Korea also signed an agreement on investments, completing four years of FTA negotiations.  Also in August 2009, ASEAN and South Korea agreed to set up a special fund to support cooperation schemes including projects aimed at reducing the economic gap in Southeast Asia. South Korea contributed $1.5 billion to the fund.

Korea's biggest trading partners:

South Korea’s biggest trading partners in Asean are Singapore ($30 billion in 2008) and Malaysia ($15 billion), but trade with Vietnam and Thailand are catching up, reported the newspaper. The growth in trade has been so rapid in recent years that ASEAN is now South Korea’s third-largest trading partner, after the EU and China, surpassing the US and Japan.

South Korea is ASEAN’s fifth-largest trading partner. The partnership has evolved from trade links to investments. South Korea’s direct investments in the rest of Asia have multiplied five-fold over the past 10 years, amounting to $10.8 billion in 2008. ASEAN was the second-largest recipient of these investments, with Vietnam one of the largest beneficiaries due to its low-cost base and skilled labor.

The South Korean government has also used more than $700 million of economic aid over the past decade to help alleviate poverty, build institutions and impart technical training in Southeast Asia as part of its goal to close the wide development gap between the relatively well-off members and the less-developed members of the group.




Read more about ASEAN Free Trade Agreement on our website:


Free Trade Agreements with Asia  - Free Trade Agreement with Asia





 
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