South Korean trade and investments in the Far Eastern region increased by 6% in the last year and the first half of 2017. In comparison to the potential of the region, this is not a very big amount, said Jung Taik Hyun, President of the Korea Institute for International Economic Policy, in an interview to valdaiclub.com on the sidelines of the Eastern Economic Forum in Vladivostok.
“The amount of trade is about 4 billion dollars, but the total Korean trade is about 1 trillion dollars. We have to expand our relationship. One of the ways, as it was mentioned in the Forum, is the signing of a free trade agreement between Korea, Russia and the Eurasian economic Union,” Dr. Hyun said.
According to Jung Taik Hyun, another way is to determine several specific projects. “Such projects can be fishery production, shipbuilding, construction of special industrial complexes, particularly focusing on small and medium companies. Agricultural area also has a big potential,” he added.
The third way could be an establishment of a special government fund regarding the Korea-Russia economic cooperation, particularly in the Far Eastern region.
The good example of the bilateral cooperation is the shipbuilding. Recently the Russian LNG tanker Christophe de Margerie built by Daewoo, delivered gas to South Korea through the Northern Sea route.
“Korean shipbuilders have good skills and competiveness. But there are not only tankers. We have now talks with Russians about vessels for the fishery industry. The Russian fishery industry, especially in the Far East, is not so modernized as required. Korea can help in this field, creating, for example, joint ventures. This area has to be thoroughly explored,” Dr. Hyun said.
The political and economic ties between Russia and South Korea are good, but there is still red tape, for instance, the Russian bureaucracy, which prevents the effective activity of the South Korean companies in the region. This is a very sensitive issue, the expert stressed. Korean businessmen in the Far East meet with difficulties, which need to be overcome.
“The free trade agreement regulations should help to resolve these problems with a regular standing consultation mechanism. If there is some problem for a Korean company in Russia, we can use this mechanism, the same is related to a Russian company, which has problems with a Korean counterpart”, Dr. Hyun concluded.