Asia Pacific Trade Council Asia Pacific Trade Council 730 - 999 Canada Place, Vancouver, B.C

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Asia Pacific Trade Council Asia Pacific Trade Council 730 - 999 Canada Place, Vancouver, B.C Asia Pacific Trade Council Asia Pacific Trade Council 730 - 999 Canada Place, Vancouver, B.C. V6C 3E1, Canada 730 - 999 Canada Place, Vancouver, B.C. V6C 3E1, Canada Telephone: (604) 775-2100 Fax: (604) 775-2070 Telephone: (604) 775-2100 Fax: (604) 775-2070 www.asiapacifictradecouncil.com www.asiapacifictradecouncil.com Message from the Asia Pacific Trade Council In November 2007, the Asia Pacific Trade Council established the South Korea Market Advisory Group (KMAG) to evaluate British Columbia’s relations with South Korea and provide recommendations on how the Province can grow its trade and investment relations with this important Asia Pacific partner. South Korea is British Columbia’s fourth largest export market and just slightly behind third- place China. On the strength of rising commodity prices, and increased demand for natural resources, total exports to Korea from BC surpassed the CDN $1 billion mark in 2005. British Columbia and South Korea have an opportunity to build on this foundation and develop a more sophisticated and diverse trade relationship which capitalizes on gateway synergies – BC as a hub for engagement with North America and South Korea as a hub for engagement with Asia. The importance and potential of South Korea must not be lost. The British Columbia / South Korea relationship must be afforded attention, investment and cultivation. The KMAG recommendations focus on the following five strategic areas: building high level bilateral relationships; building the BC Government’s capacity to engage with South Korea; building British Columbia’s profile as a sophisticated research, technology and investment partner; identifying new areas of opportunities in the BC / South Korea economic relationship; and advocating the conclusion of bilateral agreements (such as an Open Skies Agreement and Free Trade Agreement) that will remove barriers to greater trade with South Korea. The Asia Pacific Trade Council fully supports this report and the recommendations brought forth by the KMAG. We ask that the Government of British Columbia give full consideration to the recommendations outlined in this report, and are confident that they will help to revitalize and strengthen the BC / South Korea trade and investment relationship. Yours truly, Arthur Hara Carol Lee Arvinder Bubber Chair Vice-Chair Vice-Chair Foreword On behalf of the South Korea Market Advisory Group (KMAG), I am delighted to present the Report on South Korea to the Asia Pacific Trade Council. Despite the growing importance of the Asia Pacific region in the global economy over the last two decades, Canadians, and British Columbians, have not paid sufficient attention to developments across the Pacific Ocean. Indeed, within BC itself, the continued growth of ethnic Asian communities, including permanent and temporary residents, provides tangible evidence that the Asia Pacific region matters to BC. It is critically important that the Government of British Columbia allocate adequate resources towards ensuring that the important relationships with the Asia Pacific, including South Korea, are established and strengthened. This Report, the fourth in a series of market reports prepared for the Asia Pacific Trade Council outlines the foundations of the BC-South Korea economic relationship, the strengths and complementarities between the two economies, and areas of potential mutual interest and cooperation. Although BC’s history of trade and commercial relations with South Korea has been relatively short, South Korea is becoming an increasingly important economic partner for BC, and as such, deserves greater attention from both the private sector and from government. It may surprise some that South Korea is in fact a significant player in the Asia Pacific. South Korea has a strong presence in China’s manufacturing industries, and is increasing its presence in Southeast Asia. South Korean consumer goods are common in many markets around the world. South Korea has also been positioning itself as Asia’s premier transportation and logistical hub, especially for the Northeast Asian region. The growing complexities of the movement of goods, capital, and people around the world require a more flexible, multi-dimensional approach when looking at Asia. BC must adjust is mental lens to the emerging role of South Korea as a gateway to Northeast Asia. The recommendations presented in this Report are intended to provide ideas and stimulation for discussion and to direct government on how and where to look in developing a stronger economic relationship with South Korea. The KMAG believes that the Government of British Columbia can and should take a proactive leadership role in building stronger linkages to South Korea. The recommendations and background material contained herein are the result of discussions in KMAG meetings, and consultations with British Columbia businesses, academic institutions and other experts and organizations familiar with or interested in South Korea. I am extremely appreciative of their participation, input and insight, and I present our recommendations on their behalf. Tae-hoon Oum, Chair South Korea Market Advisory Group June 18th, 2007 Table of Contents Executive Summary....................................................................................................... 1 Summary of Recommendations ....................................................................................3 Section 1 - Introduction & Terms of Reference ...........................................................5 Section 2 - South Korea in Context and its Importance to British Columbia...............6 Section 3 - British Columbia’s Economic Relationship With South Korea ..................9 Section 4 - Recommendations And Discussions......................................................... 19 Section 5 - Summary Of Kmag Activities .................................................................... 30 Section 6 - Conclusion ................................................................................................. 32 Appendix 1 - BC’s Education Sector ........................................................................... 35 Appendix 2 - BC’s Tourism Sector .............................................................................. 39 Appendix 3 - BC And High Technology ..................................................................... 42 Appendix 4 - BC’s Forestry Industry........................................................................... 46 Appendix 5 - Status Of Canada-South Korea Air Services And Open Skies............... 48 Appendix 6 - South Korea – Region Profiles And Transport Hubs ............................ 52 Appendix 7 - Asia Pacific Trade Council – Members And Advisory Group............... 56 Appendix 8 - List of Individuals Consulted................................................................. 59 Appendix 9 - BC - Korea Statistics .............................................................................. 61 Executive Summary South Korea is the world’s 11th largest economy with GDP of almost C$1 trillion and a population of 48 million. It is also the world’s 10th largest trading nation with US$325 billion in exports and US$310 billion in imports in 2006. Over the last two decades, South Korea has transformed itself into a dynamic, knowledge-based economy with strong scientific research capability and high technology industries. All of this in a country that is only three times the size of Vancouver Island. South Korea is important to British Columbia in several respects. BC’s merchandise exports to South Korea, C$1.37 billion in 2006, are only C$120 million less than BC’s exports to China (C$1.49 billion), and approximately four times BC’s exports to India (C$346 million). South Korean firms are establishing plants and factories in China and other Asian countries in record numbers (11,061 plants and factories in China alone as of 2004) and are buying raw materials and parts not just for the domestic market but also to supply their facilities in other Asian countries. Therefore, an understanding of economic ties with South Korea does not mean simply looking at BC-South Korea trade links. South Korea has been very successful in developing as a Northeast Asian business/transport/logistics hub and BC’s gateway initiative can learn from South Korea’s effort and success in this area. Additionally, if Pyeongchang in South Korea is selected as the site for the 2014 Winter Olympic Games, BC’s Olympic experience will present many opportunities to BC firms looking to provide Olympic-related services. South Korea has not been afforded a level of attention that is commensurate with the country’s impressive rise or with the rapidly growing Korean-Canadian community in BC. The following recommendations, generated by the South Korea Market Advisory Group (KMAG) under the auspices of the Asia Pacific Trade Council, are designed to provide the BC Government with a short list of concrete actions that will improve BC’s commercial relationship with South Korea. The recommendations were developed in the belief that BC’s ties with South Korea can also be leveraged to improve BC’s connections to other parts of Asia and South Korea’s ties with other parts of Canada. KMAG urges the BC Government to take a proactive leadership role in relations with South Korea, and to work closely with the federal government on key issues such as an Open Skies air services agreement and a bilateral free trade agreement with South Korea. This report is intended to
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