On this page
- Key opportunities for exporting to Korea
- Korea-Australia Free Trade Agreement
- Victorian Government support
- Advice on doing business in Korea
The Republic of Korea (also known as South Korea) has a population of 51 million and is the world's 11th largest economy (based on nominal GDP). Korea is the world's leading producer of displays and memory semiconductors and the second largest shipbuilding country.
Korea has significantly opened up its economy to foreign investment in recent years, which is modernising the economy. The Korean Government has placed substantial effort into creating an improved trade and investment climate, providing a great deal of opportunity for Australian products, services and investment.
Trade with Korea
Korea is Australia's third-largest export market, with bilateral trade between the two countries worth A$32.5 billion in 2014–2015.
Australia exported A$18.8 billion of goods and A$1.6 billion of services to Korea in 2014–2015. This included coal, iron ores and concentrates, beef and aluminium, as well as education and tourism services.
Korea is an important international partner for Victoria, with two-way merchandise trade valued at around A$2.9 billion in 2014-15.
Korea is Victoria's sixth largest goods export market, with Victorian exports to Korea valued at A$946 million in 2014–15. The two main products exported to Korea were aluminium and liquefied petroleum gas. Other products included beef, milk and wool.
Korea-Australia Free Trade Agreement
Negotiations on the Korea-Australia Free Trade Agreement (KAFTA) were concluded in early December 2013 and the Agreement was formally signed on 8 April 2014 during a ceremony in Seoul, Korea.
This Agreement will help create the conditions for new trade and investment opportunities between Victoria and Korea and will present new opportunities to deepen and expand the trade relationship across a range of goods and services sectors. Of particular importance to Victoria will be the benefits to the agriculture (including food and beverage), financial services, leisure, health and IT sectors.
Current and Emerging Opportunities
Key opportunities for Victorian export growth include:
- Food and Fibre
- Energy Technology
- Health and Aged Care
- International Education
- Innovative Technologies
Food and Fibre
Victoria's exports of food and fibre products to Korea in 2014–15 were A$370 million. 36 per cent of this trade was in meat (predominantly beef), 19 per cent in dairy and 16 per cent in grain.
Victoria has seen strong demand for safe, reliable and clean food products, particularly in the healthy, functional foods categories.
According to the International Visitor Survey (IVS) released in December 2015, Korea is the 13th largest source of visitors to Australia. In the year ending December 2015, 211,000 Koreans visited Australia. Victoria received 21 per cent of Korean visitors to Australia, with 45,000 Korean arrivals to Victoria in the same period.
Visit Victoria currently works with the major airlines and key trade partners to seek to grow visitation, length of stay, yield and regional dispersal by positioning Victoria as a compelling leisure destination.
Korea aims to become a global hub of the renewable energy industry and to generate more research and development (R&D) investment. Korea's 'Green Growth Strategy' will also provide opportunities for Victorian energy companies to partner with Korean industry in the development of clean energy projects.
Health and Aged Care
With a low fertility rate and one of the fastest ageing populations, Korea will see an increasing need for more services and products in the areas of health and aged care. Opportunities for Victorian companies with healthcare-related products and services are emerging in the areas of medical R&D, education, medical devices and other areas of healthcare management.
Demand for English language skills and business training is growing in Korea, as young people seek to differentiate themselves in a competitive employment environment. Victorian institutes are well placed to meet the demands of Koreans wishing to study abroad, with Victoria's world-class academic and study environment.
The Korean Government is committed to transitioning to a knowledge-based economy, leveraging the world's highest number of broadband services per capita and mobile phone penetration of 110 per cent of the population (2013).
While Korea's strengths in hardware are well known, with companies like Samsung and LG now household names, opportunities exist for Victorian ICT companies with innovative software in areas such as smart infrastructure, cloud and mobility computing, security, smart grids and smart cities.
Korea is also exploring biotechnology and other cutting edge technology as a potential future growth area. Opportunities are emerging for Victorian companies with biotechnology and nanotechnology expertise for exports of products, services and collaboration.
Victorian Government Support
The Victorian Government Business Office (VGBO) in Seoul provides in-market intelligence and support to Victorian companies exporting to Korea. The Victorian Government works closely with the Australian Trade Commission (Austrade) in Seoul to assist Victorian exporters to access in-market trade opportunities.
Victoria also has a strong relationship with Busan, Korea's second largest metropolis, recently celebrating 20 years of a sister-state relationship.
Doing business in Korea
One of the most important aspects of Korean society is a tendency towards respect for hierarchy.
Koreans also prefer to do business with people with whom they have a personal connection. It can therefore help if you are introduced to a prospective business associate through an intermediary.
Business cards are essential in Korea for building relationships with the people with whom you are doing business.
Relationships are developed through informal social gatherings that often involve a considerable amount of drinking and eating. Koreans often prefer to discuss business over dinner.
Regulatory and Legal Environment
Products are subject to a fluctuating list of tariffs and tariff quotas. Tariffs are based on the two column Harmonised System.
Duties are mainly a percentage of the cost, insurance and freight (CIF) value provided such value is based on current domestic value at date of export.