South Korea will ‘swiftly’ begin discussions with the Association of Southeast Asian Nations (ASEAN) to update the free trade agreement (FTA) signed nearly two decades ago, to boost bilateral trade, the industry ministry stated on Monday.
The Ministry of Trade, Industry, and Energy revealed the plan as President Lee Jae Myung concluded his two-day visit to Malaysia for the annual Korea-ASEAN summit, where he suggested initiating talks to enhance the FTA, targeting an annual bilateral trade volume of $300 billion by 2029.
Korea and ASEAN finalized an FTA on goods in 2006, followed by deals covering services in 2007 and investment in 2009. The ministry stated that both sides plan to modernize the FTA to incorporate new trade priorities, such as the digital economy, supply chains, and climate change.
ASEAN is now Korea’s third-largest trading partner, with exports to the region totaling around $114 billion last year.
The ministry added that Korea also plans to broaden its network of trade deals, including FTAs and comprehensive economic partnership agreements, with individual ASEAN countries to boost exports of electric vehicles, steel, and petrochemical products.
During President Lee’s visit to Malaysia, Korea also finalized a bilateral FTA with the country, marking Seoul’s 27th free trade agreement. The agreement was formalized through a joint declaration signed by Trade Minister Yeo Han-koo and Malaysia’s Minister of Investment, Trade and Industry, Tengku Zafrul Aziz. Yeo highlighted that the new agreement could strengthen collaboration with Malaysia in future-oriented sectors such as the digital economy, clean energy, and biohealth.
“Korea will be able to improve its trade conditions with this bilateral FTA as it further opens markets for Korea’s key export items,” Yeo said.
The FTA with Malaysia will boost opportunities for Korea’s automotive, steel, and chemical industries, building on the access already provided through the ASEAN FTA and the regional comprehensive economic partnership (RCEP), which includes ASEAN, Korea, China, Japan, Australia, and New Zealand.
Once enacted, the new agreement will grant mutual access to over 90% of each nation’s markets. Additionally, the two nations plan to introduce further tariff reductions or eliminate duties on hundreds of products.
Malaysia ranks as Korea’s third-largest trading partner within ASEAN and its fourth-largest place for investment. The ministry added that Seoul will collaborate with ASEAN to broaden the scope of the RCEP and enhance bilateral exchanges focused on economic and trade matters.
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