Republic of Korea Country Brief - March 2009

Introduction

Australia and the Republic of Korea (ROK, also known as South Korea) are strong economic, political and strategic partners which share common values and interests. Direct personal links between the two countries are increasing and make a significant contribution to the relationship. Economic relations are complementary and growing, with the ROK a key market for Australian minerals, energy and travel services. Australia is a major market for South Korean passenger vehicles, electronic goods and household appliances. The investment relationship is also growing and diversifying.

Australia and the ROK have common strategic interests, particularly in seeking a peaceful resolution to tensions on the Korean peninsula. Both countries have important alliance partnerships with the United States and both have made significant and practical contributions to efforts to secure regional security and stability, such as sending troops to Afghanistan, Iraq and East Timor.

Political Overview

Government and Administration

Since its establishment in 1948, the Republic of Korea has maintained a presidential system (except briefly when a parliamentary system was in place between June 1960 and May 1961). Under the presidential system, government power is shared by three branches: the executive (headed by a president, elected for a single five-year term), the legislature (a single-house National Assembly) and the judiciary.

The President

The president holds supreme power over all executive functions of government, within the constraints of the Constitution. The president appoints public officials, including the prime minister (with the approval of the National Assembly), ministers (who need not be members of the National Assembly) and the heads of other executive agencies. The president is also commander-in-chief of the armed forces. The president is limited to serving a single five-year term. Lee Myung-bak was elected president on 19 December 2007 and inaugurated on 25 February 2008.

The current Cabinet of the Republic of Korea

The National Assembly

Legislative power is vested in the unicameral National Assembly, comprising 299 members elected for a four-year term. This includes 245 members elected by popular vote, with the remaining 54 seats distributed proportionately among political parties according to a second preferential ballot. A regular legislative session, limited to 100 days, is convened once a year. Extraordinary sessions, limited to 30 days, may be convened at the request of the president or at least 25 per cent of the Assembly members. Several extraordinary sessions are usually held each year. The Grand National Party (GNP) won a majority of 153 seats in the National Assembly elections on 9 April 2008, and has gained additional seats subsequently, including in a merger with minor conservative groups (refer below). The next National Assembly elections are scheduled for April 2012.

The Judiciary

Judicial power is vested in the courts (constitutionally an independent branch of government). The court system functions on three levels: the district courts, the appellate courts and the Supreme Court, which is the final court of appeal. The Chief Justice is appointed by the President, with the consent of the National Assembly, to a single six-year term. The President appoints Supreme Court judges on the recommendation of the Chief Justice, and lower-court judges are appointed by the Chief Justice with the consent of the Conference of Supreme Court Justices. A separate Constitutional Court renders judgments regarding the constitutionality of laws, impeachment cases, jurisdictional disputes between state agencies and the dissolution of political parties. There is also a Family Court.

Local Government

The ROK is administratively divided into seven metropolitan cities and nine provinces. Metropolitan cities are further divided into districts or wards, while provinces are divided into cities, counties and towns. Until 1995, senior local and provincial government officials were appointed by the president. From that time, elections for city mayors, provincial governors, and other local representatives have been held every four years, most recently in May 2006.

More detailed information on the ROK's system of Government can be found at the official ROK Government website.

Recent history and political developments

From 1910 to 1945, Korea was subject to colonial rule by Japan. Following World War II, Korea was under US military control for three years until 1948, when the first Republic of Korea government was established after a UN-supervised election. In the post-Korean War period (after 1953), following the Presidency of Syngman Rhee, there was a series of Korean military dictatorships, with the first democratic election of a president occurring in 1987.

While the ROK is today one of the most vibrant democracies in Asia, political parties have weak institutional roots. In general, political parties divide according to the personality of their leaders and regional affiliations rather than along ideological lines, although this is changing gradually, reflecting a new generation of National Assembly members and voters.

President Lee Myung-bak, of the conservative Grand National Party (GNP), won the presidential election on 19 December 2007. A former top executive of the Hyundai Group and former mayor of Seoul, Lee attracted 48.7 per cent of the vote, ahead of Chung Dong-young from the United New Democratic Party (UNDP) at 26.1 per cent and former GNP colleague Lee Hoi-chang, who ran as an independent and gained 15.1 per cent. President Lee had stood on an economic reform platform, including further deregulation of the economy and a tougher approach to unions. By these reforms he aims to make the country more attractive to foreign investors.

In National Assembly elections on 9 April 2008, the GNP won 131 of 245 districts and secured 22 of the 54 proportional seats, making a majority of 153 of 299 seats in the 18^th National Assembly. The party formerly called the United Democratic Party (UDP) won 81 seats in total (66 districts and 15 proportional seats), down from 136 seats prior to the election. The UDP has now merged with the minor Democratic Party under the latter’s name. The Liberty Forward Party and Pro-Park Alliance conservative parties won 18 seats and 14 seats respectively. Voter turnout was a record low at 46 per cent of 37.8 million eligible voters, according to the Korean National Election Commission.

In the months following the election, the GNP gained seats from among the minor conservative parties and independents, bringing its majority to 171.

Political Party	As at 6 Mar 2009	9 April 2008	15 April 2004	13 April 2000
Grand National Party (GNP)	171	153	121	133
Democratic Party *	83	81	152	-
Pro-Park Alliance (PPA)	8	14	-	-
Liberty Forward Party (LFP)	20	18	-	-
Democratic Labor Party (DLP)	5	5	10	0
New Progressive Party (NPP)	-	0	-	-
Creative Korea Party	1	3	-	-
(Former) Democratic Party (DP) (now part of the main opposition Democratic Party)	-	-	9	115
United Liberal Democrats (ULD)	-	-	4	17
Minor parties	-	-	0	3
Independents	7	25	3	5
Total	295 **	299	299	273

(* formerly UDP, UNDP and Uri Party)

(** in addition, four seats are currently vacant. These will be contested in by-elections on 29 April 2009)

Foreign Relations

Since the Korean War, the ROK has been preoccupied with the military threat from North Korea (the Democratic Peoples' Republic of Korea or DPRK) and has relied on the United States to guarantee its security. At present, the United States maintains around 28,000 troops in the ROK.

By virtue of geography and economic influence, relations with the major powers – China, the United States, Japan and Russia – remain the most important foreign policy priorities for the ROK, after its relationship with North Korea. In December 2008, a Japan-China-ROK Trilateral Summit, the first to be held independently of multilateral meetings, met in Japan. At this summit, the three heads of government signed a Joint Statement on International Finance and Economy and a Joint Statement for Tripartite Partnership, released an Action Plan for Promoting Trilateral Cooperation and a Joint Announcement on Disaster Management Cooperation and agreed to hold such summits annually.

Over time, notwithstanding the importance of the great powers in its region, the ROK has actively sought to diversify its diplomatic and trade links and has made considerable efforts to ensure itself a place in the international community commensurate with its economic status. It joined the UN in September 1991 and the Organisation for Economic Co-operation and Development (OECD) in 1996. It is an active member of the World Trade Organization (WTO), regional fisheries organisations, UN agencies and regional organisations such as Asia-Pacific Economic Cooperation (APEC), the ASEAN Regional Forum (ARF), and the East Asia Summit (EAS). It also takes part in the Asia–Europe Meeting (ASEM) and is a dialogue partner of the Pacific Islands Forum.

Under the current Lee administration, the ROK sees itself as a “middle power” that is well-positioned to play a pivotal role on global and regional issues, such as disarmament. It appreciates the benefits of working together with Australia, which it sees as sharing similar values and interests.

Foreign policy under the Kim Dae-jung administration (1998-2003) emphasised a 'sunshine policy' of engagement with the DPRK. President Kim's overriding objective was to secure regional peace and stability, and build a firm foundation for reconciliation with the North and the eventual reunification of the peninsula. The Roh Moo-hyun administration (2003-2008) sought to encourage regional partners to urge North Korea to seek a peaceful, diplomatic route to engagement with the international community and to abandon its nuclear weapons programs.

President Lee Myung-bak is taking a tougher line on North Korea, linking economic aid to the need for North Korea to end its nuclear arms program. Since August 2003, the ROK, North Korea, the United States, China, Japan and Russia have met regularly in Beijing for Six-Party Talks, a process focused on finding a lasting solution to the North Korea nuclear issue.

Economic Overview

At a glance

ROK country fact sheet (pdf)

Economy

The ROK has made remarkable economic progress in the last half-century. When the Japanese occupation ended in 1945, Korea was impoverished and its economy was rurally-based. Much of its infrastructure was destroyed during the Korean War, which also had an enormous human cost. As a result, by 1960 the ROK's per capita GDP lagged behind those of Zambia and Bangladesh. Sustained high economic growth since the 1960s has led to the ROK's transformation into a highly industrialised and internationally-competitive economy. In 2007, it was the fourteenth largest economy in the world and accounted for around 1.9 per cent of total world GDP. GDP rose by five per cent in 2007.

President Lee is the ROK’s first president with a business background and was elected on a reform and privatisation platform. Early in his presidency, he sought to ease regulation of the (often family-controlled) chaebol business groups such as Hyundai, Samsung and LK and the financial sector and foreign investment.

Inflation accelerated due to higher food and energy prices in the earlier part of 2008, dampening domestic demand and consumer confidence. The ROK is particularly exposed to oil-price fluctuations, given its reliance on imports for 100 per cent of its oil. Before the worst effects of the global financial crisis had hit, the government of the ROK had already planned to spend around $US10 billion over a year as part of a comprehensive package (of tax rebates and fuel subsidies for low-income earners) to offset in part the effects of oil and food-price inflation. While consumer-price inflation hit a near ten-year high of 5.9% in July 2008, the effects of the international financial crisis subsequently subdued inflationary pressures. In response to the crisis, authorities in the ROK moved to a pro-growth approach in both monetary and fiscal policy. On 3 November 2008, the ROK government announced a fiscal stimulus package worth 14 trillion Won (US$10.9bn) consisting of around 11 trillion Won in new spending and 3 trillion Won of investment tax credits. Until the crisis, the ROK’s economy was forecast to grow by four per cent in 2008. Aided by strong exports, it continued to grow until mid-2008. Then it contracted by 5.6 per cent in the December quarter, its weakest quarterly growth rate since the Asian Financial Crisis. Over the year to the end of the December quarter, GDP fell by 3.4 per cent. On 6 January 2009, Korean authorities announced further stimulus measures: plans to invest 50 trillion Won over the next four years in environment-friendly projects to bolster employment. On 19 February, 2009, the Bank of Korea cut its key interest rate for the sixth time in four months since October. Despite these measures, most forecasts for 2009 suggest GDP will contract by between two and three per cent this year. The international financial crisis has also led to a significant downturn in the Seoul stockmarket.

Deteriorating terms of trade and the effects of foreign investors converting dividends from Korean shareholdings into foreign currency have led to a marked depreciation of the Korean Won from its 2008 peak. The Bank of Korea has intervened in foreign exchange markets to moderate further depreciation.

ROK's Global Partners

The ROK's traditional trade and financial links with the United States are supported by strengthening ties within Asia. China has become the ROK's largest trading partner, having overtaken the United States as the ROK's premier export destination. Despite these trends, the United States, as the ROK's main supplier of key products such as computer chips and as the main market for many Chinese goods manufactured from ROK inputs, is likely to remain key to the ROK's economic prospects for some time.

The ROK has concluded free trade agreements (FTAs) with the United States (not yet ratified), Chile, Singapore and the European Free Trade Association (Iceland, Norway, Liechtenstein and Switzerland). In addition, a goods-only agreement with ASEAN has entered into force and an agreement on services is awaiting ratification. In March 2009, the governments of Australia and the ROK agreed to launch FTA negotiations (see below under ‘Bilateral trade and economic relationship’). The ROK is currently negotiating FTAs or similar agreements with India, the European Union, Canada, Mexico, ASEAN (on investment), Japan and the Gulf Cooperation Council, and concluded preparatory FTA talks with New Zealand in November 2008. Negotiations with Peru are expected to start in March 2009. The ROK has also been considering FTAs with China, Russia, Turkey and MERCOSUR (a South American regional trade agreement). The ROK is active in a number of international trade and economic fora, including the World Trade Organization, APEC and OECD. It holds regular consultations with Europe within the Asia-Europe Meeting (ASEM).

Bilateral Relationship

History

The first contact between Australia and Korea took place in 1884, when Australian missionaries landed at Busan. Australian photographer George Rose travelled the length of the peninsula in 1904 and photographed the country and its people. His images of everyday Korean life, clothing and customs form a valuable part of Korea’s documentary history.

George Rose publication

The relationship was strengthened by Australia's participation in the United Nations (UN) Commissions on Korea (beginning in 1947) and in the Korean War (1950-53). More than 18,000 Australian troops served under UN command during the war and 339 Australians died.

Full diplomatic relations were established between Australia and the ROK in 1961. Since then, Australia and the ROK have become important economic, political and strategic partners who share common values and interests. People-to-people links are strong and increasing, and our bilateral economic relationship is complementary, longstanding and robust.

Government Contacts

Australia-ROK high-level contact is substantial and expanding.

President Lee Myung-bak visited Australia from 4 to 6 March, 2009, accompanied by Mr Yu Myung-hwan, Minister for Foreign Affairs and Trade, Mr Lee Youn-ho, Minister for the Knowledge Economy, and Mr Kim Jong-hoon, Minister for Trade. Prime Minister Rudd and President Lee released a Joint Statement on Enhanced Global and Security Cooperation (refer to Security below) and announced agreement to launch negotiations for a free trade agreement (FTA – see below). They also discussed shared regional and global challenges, including the global financial crisis.

Prime Minister Rudd visited the ROK on 10-11 August 2008 and held discussions with President Lee Myung-bak. The two leaders agreed to strengthen bilateral security cooperation and that officials would hold preparatory discussions on a free trade agreement (FTA). A Memorandum of Understanding (MOU) on closer education cooperation and an Information Sharing Arrangement between the Australian and ROK Departments of Defence were signed during the visit.

The ROK Minister for Foreign Affairs and Trade, Mr Yu Myung-hwan, visited Perth and Sydney on 22-24 January, 2009. At the annual Australia-ROK Foreign Ministers’ Meeting, held in Perth on 23 January, he and the Hon Stephen Smith MP discussed opportunities to strengthen security cooperation and the potential benefits of an Australia-ROK FTA.

Previously, the Australian President of the Senate, the Hon John Hogg, visited the ROK from 17-20 December 2008. During his visit, Senator Hogg met Prime Minister Han Seung-soo, Minister for Foreign Affairs and Trade Yu Myung-hwan, and Speaker of the National Assembly Kim Hyung-oi. Julie Owens MP, Chair of the Australia-Korea Parliamentary Group, visited the ROK from 23-29 November, 2008.

In June 2008, the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, attended the 4^th Korea-Australia and New Zealand Broadband Summit. During a visit on 20-22 June, 2008. the Minister for Climate Change and Water, Senator Penny Wong, met with the ROK Minister for Environment, Mr Lee Maa-nee, at the Major Economies’ Meeting on climate change.

The Minister for Foreign Affairs, Mr Smith, visited Seoul from 6-8 May 2008 for the Foreign Ministers’ Meeting. In addition to meeting his counterpart Mr Yu Myung-hwan, Mr Smith held discussions with ROK President Lee Myung-bak, Minister for National Defence General Lee Sang-hee, Minister for Unification Mr Kim Ha-joong and National Assembly Representative Mme Park Geun-hye.

The Hon Tony Burke MP, Minister for Agriculture, Fisheries and Forestry visited the ROK from 8-10 April 2008. During his visit, Mr Burke met then-Minister for Agriculture, Fisheries and Food Chung Woon-chon and Minister for Trade Kim Jong-hoon. The Australian Speaker of the House of Representatives, Mr Harry Jenkins MP, represented Australia at President Lee Myung-bak's inauguration in Seoul on 25 February 2008.

Australia-ROK Ministerial Joint Trade and Economic Commission (MJTEC) meetings discuss bilateral trade and economic issues. The fifth MJTEC is expected to be held in 2009. Officials also meet regularly for wide-ranging consultations.

Security

Australia and the ROK share key security interests in North Asia and the Asia-Pacific region, with peace and stability on the Korean peninsula critical to the economic performance and security of both countries. Both support a nuclear-free Korean peninsula and regard the continued commitment of the United States to the Asia‑Pacific as critical to stability and prosperity in the region.

On 5 March 2009, the Prime Minister of Australia, the Hon Kevin Rudd MP, and the President of the Republic of Korea, HE Lee Myung-bak, released a Joint Statement on Enhanced Global and Security Cooperation.

The Statement reflects Australia and Korea’s shared values and the importance we both attach to addressing security issues in the region and the world. It builds on the significant security cooperation that already exists between us and paves the way for closer cooperation bilaterally and in regional and multilateral fora. Specific areas of cooperation include: law enforcement, border security, counter-terrorism, disarmament and non-proliferation, defence and disaster response. The Statement provides a framework for expanding practical defence cooperation in areas such as military information sharing, peacekeeping, civil-military cooperation, joint exercises and training, and defence industries. The Statement is a non-binding document of less-than-treaty status.

Security issues are discussed regularly by the two countries, including at Foreign Ministers' consultations, Pol-Mil (political-military) meetings between senior foreign ministry and defence officials, Mil-Mil talks, annual Chief of General Staff Exercises and through exchanges with the Australian Defence Force (ADF) staff colleges and the ADF Peacekeeping Centre. The Royal Australian Navy makes routine ship visits to the ROK, conducts exercises with the Korean Navy and holds Navy-to-Navy talks. Security issues are also addressed in multilateral fora such as the ASEAN Regional Forum.

The ROK and Australia share a strong commitment to regional and global initiatives against terrorism and to prevention of the proliferation of weapons of mass destruction. ROK forces serving in Afghanistan were withdrawn in December 2007; a small number of Korean civilian staff remain in the country, working in the Provincial Reconstruction Team in Parwon province.

At its peak, the ROK troop deployment to Iraq was 3,500 - the third largest contribution after the US and the UK. In December 2007, the National Assembly voted in favour of a proposal to reduce ROK forces in Iraq to 650 but extend their deployment until December 2008. The ROK military personnel in Iraq were mostly engineers and medics, involved in reconstruction including road and bridge building, delivery of training to local police and officials, medical support and education projects. The remaining ROK military personnel returned to Korea on 18 December 2008. In addition, the ROK allocated US$260 million in aid to Iraq during 2003-2008, and an additional $200 million for 2008-2011.

The ROK also has around 350 troops serving in the United Nations Interim Force (UNIFIL) in Lebanon.

Science and Technology

The ROK has made advancing its science and technology capacity a major policy. Australia's strength in basic scientific research and innovation offers strong synergies with ROK's strength in commercial application. Close cooperation exists in areas such as environmental technology and biotechnology, and a scientific and technological cooperation treaty was concluded in 1999. A recent area of mutual interest has been cooperation and collaboration on broadband services. Four ministerial-level Broadband Summits have been held, the most recent in June 2008 in Seoul.

People-to-People and Institutional Links

Direct personal contact between Australians and Koreans is an important component of the bilateral relationship. Exchanges for education, tourism, culture and media purposes have increased over past decades, underpinned by strong support from the two governments, the more than 70,000 people living in Australia who were born in the ROK (69,142 as at end June 2007 – ABS preliminary estimate) and the growing Australian presence in the ROK.

Australia and the ROK signed a bilateral social security agreement on 6 December 2006 to give improved social security protection to people who have lived and/or worked in both Australia and the ROK. The social security agreement also exempts Australian employers from the need to provide ROK social security support for Australian employees sent temporarily to work in the ROK, provided the employee remains covered in Australia by compulsory superannuation arrangements. Further information is available on the Australian Taxation Office website.

The Australia-Korea Foundation (AKF), an Australian Government initiative established in May 1992, makes an important contribution to people-to-people links. Supported by a Secretariat within the Department of Foreign Affairs and Trade, the AKF funds projects and programs that broaden and deepen the relationship between Australia and the ROK, especially in the fields of commerce and industry, science and technology, education and the arts, sport and media.

Non-governmental links also include the Korea-Australia and Australia-Korea Business Councils. Their annual joint meeting allows members to network and exchange views about recent developments in the relationship, and to develop and consolidate bilateral private sector links.

People-to-people links have also been fostered through sister-city relationships, such as those between Townsville and Suwon, and Adelaide and Daejeon. Sister-state relationships are enjoyed by Queensland and Gyeonggi Province, New South Wales and Seoul, South Australia and Chungcheong Province, and Victoria and Busan.

Bilateral economic and trade relationship

Australia's trading relationship with the ROK developed rapidly during the 1960s as Seoul pursued industrialisation policies requiring large amounts of raw materials. The two countries now share a vibrant and complementary trading relationship, with Australia providing raw materials, foodstuffs and services to the ROK, and importing finished products such as cars, telecommunications equipment and computers.

Indeed, the ROK is one of Australia’s most important trading partners. It is Australia's fourth-largest export market (goods and services exports of $16.1bn in 2007-08) and sixth-largest overall trading partner (total two-way trade of $22.8bn in 2007-08). Resource commodities (energy and mineral products), plus simply-transformed metals such as aluminium and copper, account for around two-thirds of Australian merchandise exports to Korea. The largest merchandise export items by value in 2008 were coal ($5.6bn), iron ($3.4bn), crude petroleum ($2.3bn), aluminium ($776m) and beef ($702m). Tourism and education exports have also performed strongly in recent years. Australia's merchandise exports to the ROK in 2007-8 grew by 8.9 per cent over the previous financial year to reach A$14.25 billion, making the ROK Australia's third largest merchandise export market (behind Japan and China).

Australia's beef sales to the ROK, especially premium chilled beef, have increased dramatically over recent years, including as a result of the BSE-related ban on entry of US beef, imposed from late 2003 until April 2008. Australia has earned a reputation in the ROK as a clean and green producer of high-quality beef. While the return of US beef to the ROK market has increased competition, the outlook for Australian beef remains positive.

In the services sector, Australian exports amounted to A$1.9 billion in 2007-8. Education has been particularly successful, with the ROK ranked as Australia's third largest source of foreign enrolments (after China and India). There were 34,674 ROK enrolments in Australian institutions in 2007, an increase of 11.34 per cent over 2006. The Australian Education International Network (AEI) supports the education industry by maintaining a high-profile presence for Australian education and training in the ROK and promotes Australian capabilities and qualifications through generic marketing and outreach activities. Education-related travel services to ROK customers earned A$1.04 billion for Australia in 2007-8. Tourism is also very important, with 218,300 ROK visitor arrivals in Australia in 2008.. The same year, 37,900 Australian tourists listed Korea as their primary overseas destination, up 14.8 per cent from 2007.

Tariffs and other measures affecting agricultural imports to the ROK tend to be quite restrictive. The ROK is engaged in the Doha Development Agenda Round of WTO negotiations, which aims to reduce tariffs on imports, including the agricultural sector. The ROK's agricultural sector is currently undergoing gradual structural reform to increase its efficiency and enable it to compete with imported produce.

Australia-Korea Free Trade Agreement

On 5 March 2009, Prime Minister Kevin Rudd and the President of the Republic of Korea, Lee Myung-bak, agreed to launch bilateral FTA negotiations. The two nations made a commitment to negotiate a high-quality, WTO-consistent agreement that covers trade in goods and services as well as investment, and provides for progressive elimination of all forms of barriers to trade. A comprehensive FTA between these two important trading nations in the Asia-Pacific region and two founding members of Asia-Pacific Economic Cooperation (APEC) signals to the world our shared practical commitment to trade and economic liberalisation.

This joint decision followed the conclusion of preparatory talks in December 2008. A joint non-government study, concluded in April 2008, had found that an FTA between Australia and the ROK, substantially removing all barriers to trade and investment, would offer significant opportunities to further strengthen the highly complementary bilateral trade and investment relationship, and deliver gains to both countries through closer economic integration. The Department of Foreign Affairs and Trade has received submissions from organisations and individuals on the expected economic, regulatory, regional, social, and environmental impacts of a possible FTA with the ROK. For more information, visit the Australia-Korea FTA website.

Export opportunities

Despite the dominance of primary resources among Australian exports to the ROK, other opportunities exist in a diverse range of sectors, including automobiles, biotechnology, building and construction, dairy products, defence, fruit and vegetables, information and communications technology, seafood, textiles and clothing and wine.

Energy and Utilities: LNG

Australia's traditional trade in energy resources with the ROK is, broadly speaking, set to grow as the ROK's demand for energy rises. Coal and uranium are critical requirements for ROK power generation. The ROK is planning to increase the proportion of nuclear power generation, for greenhouse gas emission abatement purposes. LNG is the next strategic fuel for the ROK's economic growth. and the ROK is the second largest importer of LNG in the world. In January 2003, Australia won a major contract to supply the ROK with more than three million tons of LNG over seven years. This contract has been extended until 2016. The contract is a vote of confidence in Australia's long record as a dependable, stable and competitive supplier. Exporters of Australian LNG are pursuing further opportunities in the ROK market.

In August 2008, the ROK released a long-term national energy road map, the National Energy Basic Plan 2008-2030. Recently released measures under this plan foreshadow significant expansion of domestic LNG storage facilities. The government is pushing ahead with plans for a further 12 nuclear reactors and 19 thermoelectric power plants, to meet the ROK’s rising energy demand, plus further investment in renewable energy and energy-efficiency measures.

In coal, uranium and LNG, Australia is a major world player and has the capacity and experience to supply the ROK’s energy needs in a reliable fashion.

Wine

In recent years, ROK interest in wine has developed, resulting in a steep increase in wine imports from Australia since 2003.

Motor Vehicle Engines and Components

The ROK is one of Australia's major markets, alongside the United States and New Zealand, for motor vehicle components. GM Daewoo launched its joint venture (GM Daewoo Automotive and Technology Co) in the ROK in 2002; the resulting growth in production led to an increased demand by GM Daewoo for motor vehicle engines and components. In May 2005, Holden began exports of its Statesman model to the ROK. In 2008, the Holden Caprice entered the South Korean market.

Investment

The level of investment between Australia and the ROK is relatively small, but growing. The ROK ranks twelfth as a destination for Australian investment abroad, with a total investment stock of A$8.9 billion in 2007. In mid 2008, Macquarie Bank reported it was the largest foreign investment presence there, active in funds management and infrastructure investment. The ANZ is also active in the ROK.

The ROK’s total stock of investment in Australia reached A$7.8 billion in 2007, more than sixteen times its value in 2001 (A$474 million). Highlights have included Korea Zinc's A$1 billion investment in the Sun Metals Corporation refinery in Queensland in the late 1990s, and POSCO's A$16 million investment in 2002 in BHP-Billiton's iron ore resources in Western Australia. Currently, Korean investors are involved mostly in resource development (including in New South Wales coal mines) or in import and distribution (e.g. Hyundai, Daewoo, Kia, LG and Samsung).

Business and Financial Services

Growing exports of Australian financial services include infrastructure finance, banking and management advice. As mentioned above, Macquarie Bank and ANZ Bank maintain active commercial offices in Seoul.

Doing business in the ROK

Business success in the ROK market requires awareness of the opportunities available and an appreciation of how the market and culture operate. In addition, a well-placed and sourced personal introduction is helpful. Austrade's office in Seoul is able to assist.

For more information on doing business in the ROK and about specific export opportunities, see the Austrade website. As well as country-specific information, the Austrade website has a database that can be searched by industry.

Business Hours

Most businesses and government agencies in the ROK work a five-day week from Monday to Friday. Business hours are generally 9:00am to 6:00pm. Banks are open from 9:30am to 4:30pm on weekdays; major department stores are open from 10:30am to 7:30pm and smaller shops tend to open for longer hours.