South Korea and Russia have agreed to work together to conclude a free trade agreement in the service and investment sectors next year, raise a joint fund of US$1 billion for investment in Russia’s original technologies, and combine the technologies with South Korea’s commercial technologies for material, component and equipment competitiveness enhancement.
These agreements were reached at the 18th meeting of the Korea-Russia Joint Commission on Economic, Scientific and Technological Cooperation, which took place in Moscow on Sept. 24.
The commission is an intergovernmental organization in which the two countries discuss bilateral economic cooperation. The meeting has been held each year since 1997. This year, South Korean Deputy Prime Minister Hong Nam-ki and 15 South Korean ministries and organizations participated together with Russian Deputy Prime Minister Yury Trutnev and 14 Russian ministries, organizations and enterprises.
“Our diplomatic ties celebrate the 30th anniversary next year and our bilateral trade is expected to top US$30 billion next year,” the South Korean deputy prime minister said in his opening speech, adding, “Then, the bilateral trade volume will reach US$50 billion based on the FTA with the Eurasian Economic Union and US$100 billion based on the trilateral economic cooperation of Russia, South Korea and North Korea.”
He continued to remark that the South Korean government will prepare research programs so that the trilateral cooperation can be started without delay once certain conditions are satisfied. “Railway networks connecting the Korean Peninsula, Russia and Europe, the Northeast Asia Super Grid, pipe natural gas connection, and so on will contribute to the peace and prosperity of Northeast Asia,” he said.
South Korea and Russia are planning to start the second round of their negotiations for the service and investment FTA in Seoul within this year. At the 18th meeting, South Korea proposed that the FTA be expanded into an EAEU FTA including goods.
Also, South Korea is going to set up a network with Russia’s state-run power company and sovereign wealth fund so that the trilateral cooperation in the fields of electricity, gas and railway can be accelerated in regions such as Rajin and Khasan. To that end, the Ministry of Economy and Finance of South Korea is going to send a detailed research proposal to Russia and make a proposal to the North via Russia.
When it comes to the joint fund, 40 percent of the target value will be raised via the 18th meeting before expansion of the fund to future industries, the healthcare sector, etc. At the same time, the Korea Overseas Infrastructure and Urban Development Corporation and the Russian Direct Investment Fund are going to form a developer group for feasibility studies and investment related to infrastructure development projects in Northeast Asia and the Export-Import Bank of Korea and the Far East Development Fund of Russia will provide more financial assistance based on their US$2 billion financial cooperation initiative.
In addition, South Korea is planning to be engaged in more port, logistics complex, industrial complex and farm development projects in the Far East of Russia and more economic cooperation projects between local governments. In this context, feasibility studies on Slavyanka Port development will be completed within this year and feasibility studies on a logistics complex in Bolshoy Kamen will be initiated soon.