South Korea has enjoyed a remarkable development since the Korean War. As one of the East Asian Tigers (Hong Kong, Singapore, South Korea and Taiwan), the country experienced high growth rates and a rapid industrialization during the 1980’s. Due to the export-driven economy, the financial crisis of 1997 hit South Korea hard. However, with help from the IMF and implementation of extensive financial reforms, the country managed to restore stability to its markets. Today, South Korea has positioned itself as the world’s tenth largest economy. During a short period of time, Korea has assumed a leading position within shipbuilding, electronic equipment, computer chips, petro -chemical industry, steel and cars. Furthermore, with a population of more than 48 million people, the market potential is enormous.
Korea and Norway have signed several agreements, which regulates both trading- and economical matters, as well as cooperation within technology and Research and Development (R&D).
The trade between the two countries has developed, especially the last 15 years. Shipping and the maritime sector dominate the relationship. The trade balance has varied from year to year, mainly due to the delivery of ships from the Korean shipyards. These shipyards are producing 40 percent of the world’s new ships. The part of the trade balance which includes seafood, ICT, research equipment, metals and oil has, however, increased the last few years, and it has contributed to even out the fluctuations in the trade balance. The total Norwegian export to Korea constituted around USD 753 million in 2004, while the import was USD 376 million. It is expected that this positive trend will continue since Korea is increasing their focus on advanced and technological innovative solutions within the maritime industry, ICT, cars, energy and aquaculture.
The Korean car industry is the fifth largest in the world. As a consequence, it is not uncommon to see several Korean car-brands also on Norwegian roads.
Of the world’s five largest shipyards, four of them are in Korea. Since 1979, more than 280 ships have been built in Korea for Norwegian owners. Several of the Norwegian actors use Korea as an entry gate to other countries, when it comes to delivery of maritime equipment. The development towards more advanced ships from Korean shipyards, provides a good market for more high-technological products from Norwegian producers. It is presumed that ships with Norwegian owners make more than 1.500 port calls a year, at Korean ports. Several of the Norwegian companies present in Korea are specialized within cargo.
The Koreans consume a considerable amount of seafood. In addition, Korea is the sixth largest nation on aquaculture and the 11th fishery nation in the world. Several Norwegian seafood-exporters are represented in Korea. Some even have established joint ventures to further develop the market via local partners. So far, the Norwegian export has mainly been salmon and mackerel. However, it is expected and Norway hopes that Koreans will discover the other seafood that Norway can offer, as well.
During the summer of 2005, the negotiations of a FTA between Korea and EFTA were concluded. It is expected to be signed during the WTO summit in Hong Kong, December 2005. Norway hopes that this will help increase the trade and cooperation between the two countries also in the future.
Fields with potential are ICT, mobile solutions, broadband, electronics, car-production, and petroleum chemistry. Furthermore, medicine, energy (new and renewable sources of energy), material and nano technology are also fields of interest and highly prioritized in both Korea and Norway. Korea, as one of the largest importers of LNG (liquefied natural gas) and LPG (liquefied petroleum gas) and oil, represents potential market for Norway. Norway could contribute with its expertise within oil, gas and offshore technology and in the development of new sources of energy.