Yoon Launches New Market Strategy via ASEAN and G20
Discusses ASEAN and FTA... Expanding Supply Chain Cooperation
Key Economic Focus of Tour: 'Expanding FTA Network'
President Yoon Suk-yeol actively pursued new market opportunities at the ASEAN (Association of Southeast Asian Nations) Summit and the G20 Summit. In addition to multilateral meetings, he held about 20 bilateral talks to strengthen multilateral economic cooperation in the Indo-Pacific region and to expand exports with individual ASEAN countries that have promising markets.
According to the Presidential Office on the 7th, President Yoon plans to discuss free trade agreements (FTAs) and expanded supply chain cooperation with some individual ASEAN countries during the ASEAN and G20 summits. Since Southeast Asian markets such as Indonesia and the Philippines are rich in key minerals like nickel and cobalt, essential for electric vehicle batteries, and rare earth elements, crucial for semiconductor materials, it is easier for Korea to secure materials, while ASEAN countries can collaborate on advanced technologies, creating high potential for mutually beneficial development. Moreover, while the global economic growth rate was 3.5% last year, India, ASEAN India, and Indonesia recorded 7.2%, 5.3%, and Vietnam and the Philippines 8.02% and 7.6%, respectively, indicating a growing demand for Korean products due to expanding domestic markets.
The key economic keyword for this tour is identified as 'expanding the FTA network.' Currently, Korea has signed 21 FTAs with 59 countries, establishing the densest FTA network with ASEAN countries. Starting with the Korea-Singapore FTA in 2006, the Korea-ASEAN FTA was signed in 2007, and in January last year, the world's largest FTA, the Regional Comprehensive Economic Partnership (RCEP), came into effect after nine years of negotiations.
However, since multilateral agreements like the Korea-ASEAN FTA and RCEP involve many countries, the degree of market opening is relatively low, making it essential to conclude separate bilateral FTAs to lower the entry barriers to promising markets. Korea and ASEAN recorded a trade volume of $207.5 billion last year, making ASEAN Korea's second-largest economic partner. Given the explosive population growth in individual ASEAN countries and the significant potential of their domestic markets, expanding individual FTAs will enable market entry and trade expansion.
Choi Sang-mok, Senior Secretary for Economic Affairs, stated at a press briefing held at a hotel in Jakarta, Indonesia, the day before, "Currently, global high interest rates, inflation, and supply chain instability continue, significantly shrinking market demand and international trade. Korea is no exception and is facing export difficulties. In this situation, an urgent task for our export-driven economy is to pioneer new export markets."
The Presidential Office plans to initiate improvement negotiations for the multilateral Korea-ASEAN FTA, as consensus is growing on the need for enhancement. Since cooperation in advanced technologies such as artificial intelligence (AI) and telecommunications is strengthening beyond traditional consumer goods trade, there is a need to add future industry sectors to the FTA. In fact, at the Korea-ASEAN Summit held the previous morning, President Yoon announced the 'Korea-ASEAN Digital Innovation Flagship Project,' which focuses on ▲ creating a joint data ecosystem ▲ strengthening digital human capabilities ▲ developing AI-based innovative services. The Korea-ASEAN AI Youth Festa was also held as an official side event of the 'ASEAN-India Pacific Forum,' an official event of the 2023 ASEAN Summit. Senior Secretary Choi explained, "Once the ongoing joint research is completed, we will pursue additional liberalization and improvement negotiations on digital trade norms."
On the 5th, negotiations for Korea's accession to the Korea-Central America FTA with Guatemala, the largest economy in Central America with high growth potential, were concluded, and negotiations with Ecuador in Latin America are also nearing completion. Senior Secretary Choi said, "This will be a great boost for Korean companies entering the Latin American market," adding, "The government will continue to expand FTAs with promising markets to actively support Korean companies in pioneering new markets."
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