The Ministry of Trade, Industry & Energy of Korea announced on November 9 that South Korea’s exports to the ASEAN region totaled US$71.191 billion for the first 10 months of this year, showing an average monthly increase of 29.2%. The percentages were 13.4% and 3.6% when it comes to China and the United States, respectively. During the same period, China accounted for 24% of South Korea’s total exports, followed by the ASEAN region (16.5%), the United States (12%) and the EU region (9.6%).
The rapid growth in exports to the ASEAN region was led by Vietnam. For the 10-month period, South Korea’s exports to Vietnam increased 48.7% and Vietnam represented 8.3% of South Korea’s total exports. At present, many companies in Vietnam are exporting finished products by importing semi-finished semiconductor and display products and so on from South Korea. South Korea’s display and semiconductor exports to Vietnam increased by no less than 253.1% and 88% from a year ago in October this year.
The bilateral trade between South Korea and the ASEAN region has been boosted by their FTA signed in 2007. Specifically, South Korea’s volume of trade with the region jumped from US$61.81 billion to US$118.84 billion between 2006 and last year with an average annual growth of 6.8%. During the same period, the ratio of South Korea’s exports to the region to its total exports rose from 9.9% to 15%.
Back in 2006, the ASEAN region had been the fifth-largest trade partner for South Korea. However, it became the second-largest after the implementation of the FTA. During the past 10 years, South Korea’s volume of trade with the region grew at an annual average of 6.8% as mentioned above while the average annual growth of the international trade volume stood at 3.6%. The volume of trade with the ASEAN region has exceeded those with the U.S., the EU region and Japan since 2010.
South Korea’s exports to the ASEAN region are expected to continue to increase as the South Korean government is working on a new trade strategy in order to reduce its reliance on the U.S. and China. On November 9, South Korean President Moon Jae-in declared the New Southbound Policy during his state visit to Indonesia.