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FRIDAY, FEBRUARY 23, 2018 WWW.SCMP.COM ¢ SPECIAL REPORT ¢ Friday, February 23, 2018 S1 INSIDE: 9-PAGE SPONSORED SECTION IN-COOPERATION WITH DISCOVERY REPORTS BUSINESS SOUTH KOREA REPORT TRADE REGION’S SECURITY KEY TO ECONOMIC GROWTH The newly opened Incheon International Airport Terminal 2. SMART BUSINESS South Korea, the US and Asean must improve their strategic cooperation to tackle security concerns in the South China Sea and Korean Peninsula, writes NAZVI CAREEM Tech-savvy nation The Association of Southeast Asian Nations (Asean) has has much to offer enjoyed deep economic ties with South Korea and the United States for decades. Lee Hill-choi profile international business South Korea is the region’s and sports events. second-largest trading partner Another important seaport – while the US is the fourth-largest South Korea is often overlooked and key transport hub – is for the 10 members states. by Western enterprises when Incheon, South Korea’s third- While economic relations they are looking for a business largest urban area, which forms remain robust, it is in regional hub in Asia. Surrounded by part of the Seoul National Capital security that the three sides can superpowers China and Japan, Area where global businesses are increase collaboration, says Lee and with its neighbour in the based around Songdo Jae-jyon, senior fellow at the north regularly overshadowing it International Business District, Asan Institute for Policy Studies in the media in times of rising considered one of the “smartest” think tank in Seoul. political tension, the land of K- cities in the world and the “There’s potential for Pop culture is not always the sovereign state’s first free strategic and security obvious choice for international economic zone. Some people cooperation,” says Lee, referring businesses to set up shop. have described the hi-tech city – to Asean-South Korea bilateral However, South Korea has which is built on reclaimed land relations. “Economic and socio- much to offer. According to 2016 – as the “smartest smart city in cultural cooperation is doing gross domestic product (GDP) the world”. Another hi-tech well and once governments pave figures by Britain’s Foreign and locale is Daegu with a population the way for [it] it’s the private Commonwealth Office, the of 2.5 million known for its sector that will move ahead with nation is the world’s 11th-largest technology as well as fashion and cooperation. [But] security and economy, and the fourth largest textiles industries. strategic cooperation is different. in Asia. This nation of 50 million The country’s logistics centre From the beginning to end, [this] people is known for its tech- is Yeongjong. At least, it aims to is the role of the governments.” savvy population and general be for the international Lee adds: “What are the wealth – unsurprising for a commerce community. shared interests? Both Korea and country that is home to global Connected to Incheon Asean face huge strategic brands Samsung, LG and International Airport, this island uncertainties coming from the Hyundai. is situated off the west coast of superpower rivalry [between The country tops the Incheon city. Expansion plans China and the United States]. Organisation for Economic for the airport may benefit this “Maybe even the joint efforts Cooperation and Development’s site as it means the creation of a of Asean and Korea are unable to (OECD) 2011 PISA rankings for special economic zone, a free- compete with the superpowers, digital literacy among 16 trade zone and international but definitely the combined participating nations, including business district. The project efforts can enlarge regional Hong Kong. Its infrastructure involves the construction of influence and help protect the includes the world’s greatest Terminal 2, which was smaller countries’ autonomous US Vice-President Mike Pence (left) with South Korea’s President Moon Jae-in at the Pyeongchang Winter Olympics on Sunday, but the relationship broadband penetration, completed this year in time for strategic space in the region, as between the nations is limited only to security matters in the Korean Peninsula, says Asan Institute for Policy Studies’ Lee Jae-jyon. Photo: EPA according to the UK’s the 2018 Winter Olympics. well as make their voices heard.” Department for International The promise for smart He says South Korea’s Trade (formerly known as the technologies was kept as the relationship with the US is Lee says the one issue meaningful contribution to the enjoy preferential tariffs and set FDI, with total inflow of US UK Trade Investment). facility integrated 24 full-body limited to security of the Korean unifying the interests of all three SCS issue, given its limited the stage for the FTA. $11.65 billion. There are several cities that scanners and 63 self-check-in Peninsula against the threat of – South Korea, the US and Asean strategic leeway.” Since the FTA came into It was noted at a meeting in are equipped to serve as counters. The new US$2.5 billion North Korean leader Kim Jong- – is the South China Sea (SCS), Economically, one of the effect, Asean-Korea bilateral Manila in November 2017, held dynamic enterprising hubs for hi-tech terminal is reputedly un’s Communist regime, while where China is seeking to exert foundations of the relationship trade has increased 92.3 per cent to commemorate the 40th foreign businesses. able to service 18 million its ties with Asean are mostly more control over areas claimed between Asean and South Korea to reach US$118.84 billion in anniversary of Asean-US The capital Seoul is the passengers a year. The increase economic and socio-cultural, by several Asean countries. is the Asean-Republic of Korea 2016, up from US$61.81 billion in Dialogue Relations, that US largest commercial centre in in visitors this month will serve with few discussions on security South Korea has generally Free Trade Agreement, which 2006. Foreign direct investment exports to Asean have supported South Korea with a population Seoul as well as PyeongChang or strategic matters. maintained an arms-length has been in effect since (FDI) flows from South Korea to more than 550,000 jobs in the US about 10 million, with various where the Winter Olympics Lee believes that it would be approach, but its is directly December, 2005. Asean have reached an annual and nearly 42,000 US companies industrial clusters bordering the continues until Sunday. hugely beneficial if the US linked affected, he says. The FTA, which covers goods average of US$6 billion over the export more than US$100 billion outskirts of the city. Seoul Chungju International its alliance with South Korea to “Korea has a huge stake in the and trade in services and past 10 years up to 2016 – a 5.4 worth of goods and services to National Capital Area Airport is the closest airport to its existing, strong economic ties SCS, but to a degree is investment, aims to remove increase in the 10 years before Asean countries each year. (Sudongwon) has more than the Osong Bio-Technopolis with Asean. “[South] Korea does constrained [if] taking a strong tariffs on almost all goods, the agreement. “US companies invest more 25.6 million people, accounting biocluster that is acknowledged not understand [the]potential [it stand,” he says. “In principle, liberalise trade in services and “Asean took its position as in Asean than in any other area for more than half of the to be South Korea’s health has] to be a regional actor in a Korea is not supporting any expand investment agreements Korea’s second-largest trading in Asia,” said Philippines country’s residents, and is industry hub, 170km south of the strategic sense,” he says. parties in the territorial dispute, to provide protection to Asean partner and Korea’s second- President Rodrigo Duterte, who considered the world’s second- capital in Chungcheongbuk-do. “Asean [seems to have this] but is clear that the issue has to investors in South Korea and largest investment destination,” chaired the meeting. largest metropolitan area. This The special zone is designed view that other major powers, be governed by relevant South Korean investors in Asean. Asean said in a joint statement. “We are committed to area also incorporates most of to attract foreign direct such as the US, China, India and international laws and that At the 49th Asean Economic “Among Asean’s dialogue continue strengthening Asean- Gyeonggi province and Incheon investment in a 4.6 million Japan, are crucial for its strategic freedom of navigation should be Ministers’ Meeting in the partners, Korea maintains its US economic ties by increasing city. square metre site, where foreign interests, while South Korea is guaranteed in the SCS. Philippines in September 2017, position as Asean’s fifth-largest two-way trade and investment.” The second largest companies investing in the not really that significant. “Beyond that, any further the region’s economic ministers trading partner and Asean’s fifth- On February 15, the two metropolis in the country is complex enjoy a range of tax “The US pushed South Korea active action, including joint also reiterated their largest external source of FDI.” entities signed the US-Asean Busan, which contains the benefits from the local to [take on a more] responsible patrols, is not a [viable] option at commitment to the Asean-Korea Two-way trade between the Connect agreement, a strategic world’s fifth-largest port. Its government, including a [role on wider regional security the moment. “[Also], Asean Free Trade Area, set up 14 years US and Asean in 2016 totalled framework that would deepen skyline is full of skyscrapers, such possible exemption from rent issues, which South Korea was countries are not that confident, ago, which is an agreement that US$211.8 billion and the US was the US’ growing economic as the 110-floor tall Lotte Super and corporate taxes of up to not quite ready to take on.” I guess, about Korea making any allows traders and exporters to Asean’s third-largest source of cooperation with Asean.

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