By AFIQ AZIZ / Pic By BLOOMBERG
Bilateral trade between members of Asean and South Korea has increased by 92.3% to RM499.2 billion (US$118.84 billion) in 2016 from the RM259.63 billion recorded in 2006.
The increase was attributed to the enforcement of the Asean-Korea Free Trade Area (AKFTA) that came into force in 2007.
A joint statement by the ministers who attended the 14th Asean Economic Ministers-Republic of Korea (AEM-ROK) Consultations in Pasay City, the Philippines, on Sept 8 concurred that Asean is now South Korea’s
second-largest trading partner. “Foreign direct investment (FDI) flows from Korea to Asean stood at an annual average of RM25.2 billion in the past 10 years, a 5.4 times increase compared to the past 10 years before AKFTA took effect,” the statement read. As such, Korea is also now considered the second-largest investment destination for Asean.
As part of the effort to improve economic ties between Asean and South Korea, the transposition of AKFTA Rules of Origin Product Specific Rules from HS (Harmonised System Codes) 2012 into HS 2017 is currently in the final stage.
Once completed, the implementation of the transposition would facilitate cross-border transaction among the country members.
The Asean-Korea Economic Cooperation (AKEC) Fund and Technical Advice and Solutions from Korea (TASK) Programme are also progressing smoothly.
“We welcomed the participation of Indonesia, Myanmar and Thailand in the TASK Programme and other projects funded under the AKEC Fund,” the statement said.
To date, eight projects under the AKEC Fund have been approved, which are aimed at supporting the implementation of the AKFTA and to improve Asean member states’ capacity in the areas of trade facilitation, agriculture and fisheries, healthcare, tourism and sustainable development.
Other issues being highlighted included the establishment of sectoral boards in the areas of steel industry and healthcare; the newly launched Asean-Korea SMEs (Small and Medium Enterprises) Business Delegation programme; as well as the progress in establishing the official website for the Asean-Korea Business Council to facilitate deeper cooperation and networking among companies within the countries.
The AEM-ROK Consultations that ended last week also reported on the progress of the implementation of the Third Protocol to Amend the Asean-Korea Trade in Goods Agreement (AKTIGA) and the negotiations for further liberalisation of Sensitive Track products under the AKTIGA.
The Third Protocol Amendment recalled the two-way trade target of RM840.1 billion by 2020.
Leaders also agreed that the target of two-way trade volume by 2020 is achievable via the use of the AKFTA and effective utilisation of the Asean-Korea Centre that would enhance economic linkages.