Russia - South Korea - EAEU: Prospects of Diversification

Lee Jae-Young, President of the Korea Institute for International Economic Policy (KIEP), spoke about the prospects of trade relations between Russia, South Korea and the Eurasian Economic Union (EAEU), as well as the importance of diversification policy in the face of increasing protectionism, in an interview with on the sidelines of the Eastern Economic Forum-2018 in Vladivostok.

"Although recently we saw an increase of protectionism at the international level, the trade turnover between Russia and South Korea is increasing," said Lee Jae-Young, participant of the Eastern Economic Forum. - For example, last year the trade turnover between our countries amounted up to $ 19 billion, which is higher than in previous years. This year - from January till the end of July - the trade turnover amounted $ 14 billion, which also shows an increase by 30% compared to previous similar indicators."

Lee Jae-Young noted that a serious incentive for the development of trade between our countries could be the conclusion of a free trade agreement. The joint statement on the possibility of FTA between the two countries was made on June 22 during the visit of President Moon Jae-in to Russia. The parties agreed to "make efforts for the early start of negotiations on FTA in services and investments."

"If the FTA agreement is signed not only with Russia, but also with members of the Eurasian Economic Union, this will have a positive impact on trade between our two countries, and on increasing investment," Lee Jae-Young added.

The expert also said, that the solution of the security problem on the Korean Peninsula is of great importance for the development of South Korea's partnership with other countries. Speaking about the summit between leaders of South and North Korea, scheduled for late September, Lee said that he was optimistic about "the future of North Korea's denuclearization." According to the expert, "if peace reigns on the Korean peninsula, this will positively affect our relations with both Russia and the Eurasian continent as a whole."

South Korea is a small country with export-oriented economy, so the policy of diversifying trade relations is so important for it. Lee explained, that today South Korea's trade is heavily dependent on China and the United States - a large share of Korean exports (more than 40 percent) is connected with these countries.

"Therefore, we want to expand cooperation with neighboring, Eurasian countries, including Russia, as well as with the ASEAN countries and India, through the "New South Policy". If this happens, our country will be able to find a balance, despite various difficulties and protectionism", Lee Jae-Young concluded.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.