Australia is becoming a more important trading partner for South Korea, even with the KAFTA between the two countries a little more than a year old. Business Korea was able to sit down with Patrick Stringer, Commissioner for Victoria to the Republic of Korea, and speak with him about the relationship between South Korea and Australia’s most populous state. Patrick has served for 10 years representing Australian trade in Asia in Hanoi, Shanghai, and now Seoul. What follows are excerpts from the full interview.
What is the primary goal of the Victorian Government Business Office in Korea?
Korea is our 5th largest trading partner, but if you ask the average Korean on the street “Do you do business with Australia?” most would say no. And, in fact, if you asked the same question in Melbourne you’d have the same response.
Victoria’s economy is larger than Singapore, New Zealand, Ireland, or the Philippines. While we’re only 3 percent of Australia’s landmass, we are 22 percent of its GDP. Victoria established its Shanghai trade office in 1905, so we have been in the business of international trade and representing our own interests for well over 100 years.
What Korean goods are most popular in Victoria in particular or Australia in general, and vice versa?
For Korea, obviously Samsung, Hyundai, all those electronics products, and obviously automobiles do very well in Australia.
Conversely, Koreans probably eat a lot more Victorian food than they think. Victoria produces 80 percent of Australia’s dairy. Meat is another big one. Victoria is also Australia’s greatest exporter of processed food, like biscuits, spaghetti, or prepared foods of any kind that say made in Australia. Also, a lot of wine. It’s one of the areas where we under-perform in the Korean market, unfortunately. Only 3 percent of imported wines in Korea come from Australia. It should be 10-12 percent.
And, of course, the elephant in the room is education, which is Victoria’s largest international export. International students studying in Victoria is our largest export.
Do Australian and international students pay different rates for university?
No, full fee paying students pay the same no matter where they’re from. But because of our tax system, many Australians don’t pay full fees; they pay on a schedule of fees. And also Australians can get federal student loans.
One of the things Melbourne is known for is being ranked number two on the Best Student Cities put out by the QS Best Student Cities 2015 list. Paris, Melbourne and London are the top three. Melbourne is always in the upper echelon of student-friendly international university towns. We have the best tram network in the world, and it is even free for students in the Central Business District. We’ve got more than four universities there. Monash is the number one modern university in the world, meaning among universities established after World War II. It’s usually ranked one or two. And the University of Melbourne is Australia’s top-ranked university, which has produced a number of Nobel Laureates in several fields, and is consistently ranked among the top 30 universities in the world.
Last year, there was AUS$1.86 billion of goods going to Victoria from South Korea, and only AUS$1.1 billion of goods coming to Korea from Victoria. What do you think about this trade deficit on Victoria’s part?
Not worried in the slightest. We take a long-term view. People will get very tied up in the numbers, but you can never see international trade as a zero sum game. For some period, Korea might have a favorable balance of trade with Victoria, and Victoria might have a favorable balance in another period. In the end the important thing is to have healthy, vibrant, multiple channels of trade between two countries where neither side is creating non-tariff barriers at the border. The demands of each economy will draw upon what it needs at the time.