26 Sep Foreword by H.E. Mr James Choi, Australian Ambassador to the Republic of Korea
Australia and Korea enjoy a long-standing and complementary trade relationship. Bilateral cooperation on resources and energy, built over many decades, has underpinned the relationship. Australia’s coal, iron ore and LNG are powering Korea’s steel and energy sectors, and Korea’s mobile phones and cars contribute to Australia’s high living standards. As a result, Korea is Australia’s fourth largest trading partner.
But there are opportunities to expand and diversify our relationship as Korea transitions from capital intensive manufacturing and prepares for the economy of the future.
Science, technology and innovation, and the services underpinning the new economy, will become key themes for the next phase of our bilateral relationship.
Korea’s transition to a cleaner energy mix, with more emphasis on renewables, and scientific breakthroughs in energy technology, present new opportunities for bilateral cooperation in energy generation, capture, distribution and consumption. As Korea and Australia each develop plans for the future hydrogen economy, there will be opportunities to widen commercial opportunities.
The Fourth Industrial Revolution will bring a new wave of trade growth. Korea’s major investments in areas such as 5G mobile technology, artificial intelligence, robotics, block chain, big data and the internet of things, will position it well to be a leader in innovation.
Australia is a nation of early adopters of technology and we are also making major investments in innovation. We are well positioned to partner with Korea as it leads technological developments in self-driving cars, smart cities, smart homes and smart factories.
The Korea-Australia Free Trade Agreement (KAFTA) will celebrate its fifth year anniversary in December 2019. KAFTA enjoys a two-way preference utilisation rate of over 92 per cent for trade in goods (2017). It has helped drive bilateral trade growth and provides a strong platform to diversify our trade relationship, particularly in services and investment.
Australia’s world-class services sector and Korea’s growing service economy will bring opportunities for trade and cooperation in infrastructure development, financial services, and medical services. And, as Korea’s population ages, it is seeking out higher and more reliable returns for its pension and investment funds.
The level of investment between Australia and Korea is modest but growing. Korean inbound investment is beginning to diversify into non-traditional sectors such as biotechnology, retail and cosmetics. But Korea only ranks as Australia’s 15th-largest foreign investor. By raising the screening threshold for Korean private investors in non-sensitive sectors, KAFTA has helped reduce barriers to investment and delivered the clear message that Australia is open for business.
There has never been a better time to do business with the Republic of Korea.