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  • 30th Anniversary of Korea-Russia Ties, Trade Volume and the Number of Tourists Increased 25 times
    2020-09-07 hit 1462

       30th Anniversary of Korea-Russia Ties, Trade Volume and the Number 

                         of Tourists Increased 25 times over 3 Decades

    KITA's assessment of economic cooperation between Korea and Russia for 30 years and prospects... great potential for cooperation in energy, logistics, etc. -

     

    This year marks the 30th anniversary of diplomatic relations between Korea and Russia, Strengthening bilateral trade cooperation, building trust based on human exchange, and reorganizing strategies in response to COVID-19 crisis were suggested as new ways to expand cooperation.

     

    According to a report titled “The 30th Anniversary of Korea-Russia Diplomtic Relations, an Assessment of and Prospects for the Economic Cooperation” issued by the Institute for International Trade (President: Choi Yong-min), the Korea International Trade Association, bilateral trade skyrocketed from 888.8 million dollars in 1990, when Seoul formed official relations with the Soviet Union, to 22.34 billion dollars last year. The number of tourists between the two countries in 1990 was approximately 30,000 but after the establishment of ties and the agreement of a visa-waiver program in 2014, the figure reached a record high of 770,000 last year.

     

    Since Korean companies are actively making inroads into Russia, Russian consumers' perception of Korean brands is increasingly positive. Korean products are becoming more popular and Samsung Electronics topped the cell phone market in Russia in 2019, Hyundai Motor Group took the second place in vehicle market and LG Electronics was number two in household appliances.

     

    The report said, “Russia hopes for development in Far East Asia and Siberia and cooperation with the Asia-Pacific region, and Korea hopes to stably secure energy sources and expand into the Eurasian market. Therefore, the two countries share mutual interests," and added, “If energy and logistics projects like the construction of gas pipelines, establishment of electrical grids and connection of railroads realize, they will result in a 'win-win' economic effect for both countries.”

     

    However, the report also stated, “With the nature of Russia's economy that relies on exports of resources, trade between Korea and Russia is highly volatile due to changes in the external environment such as raw material prices and sanctions from the West. Korea's chronic trade deficit with Russia since 2009, and the surge of Russia's imports from China are also risk factors, and advised, Complex interests such as Western sanctions on North Korea and Russia, the trade dispute between the United States and China, and the reinforcement of China-Russian relations will serve as variables. Plus, the Russian government's policy toward fostering alternative industries to replace imports and the rapid economic downfall in the second quarter due to the spread of COVID-19 must be thoroughly examined.

     

    Kim Hyun-soo, a senior researcher at the Korea International Trade Association, said, In order to expand economic cooperation between the two countries, it is necessary to promote trade cooperation such as the Korea-Eurasian Economic Union (EAEU) Free Trade Agreement (FTA), and the Korea-Russia Service and Investment FTA, and improve the competitiveness of Korean companies through localization of manufacturing and production, and stressed, It is required to expand the arena of exchange between youth, businessmen, and academics to become the cornerstone of cooperation, and overcome internal and external risks of both countries based on trust and partnership. 

     

     

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