S. Korea's exports to ASEAN on the rise
The Association of Southeast Asian Nations (ASEAN) has replaced the United States and Europe as South Korea's biggest export market for the second month in a row in January, government data showed Sunday.
ASEAN's 10 member countries accounted for 14.5 percent of South Korea's exports in January, compared with 12.4 percent for Europe and 11.6 percent for North America, according to the Korea International Trade Association.
South Korea's exports to the ASEAN nations have been on the rise since its portion was at the 9-percent level in 2006, but its shipments to the U.S. and Europe have declined from some 20 percent and 16 percent, respectively, in 2002, the association noted.
Seoul's exports declined 1.3 percent in 2012 from a year earlier, but its overseas shipments to the ASEAN market grew 10.4 percent, data by the customs agency showed.
Analysts said that the trend mainly came as demand for Korean products in the U.S. and Europe has dwindled due to the 2008 global financial crisis and the eurozone debt crisis.
"The ASEAN countries are showing strong growth momentum among major economic blocs. Korea's exports to those nations are likely to follow a rising trend in the long term," Park Sang-hyun, a senior economist at HI Investment & Securities Co.
The ASEAN countries' economic growth and their cheap labor have been luring foreign capital and leading other developing countries to relocate their overseas factories from China to those countries, analysts say.
The five major ASEAN countries -- Indonesia, Thailand, Malaysia, Singapore and the Philippines -- posted yearly economic growth of above 5 percent between 1999 and 2008.
China and Japan are also vying for a bigger slice of the ASEAN market. China's exports to the ASEAN countries accounted for 10.1 percent out of its total in January, compared with an average of 7-8 percent in the 2000s, according to data by CEIC, a provider of economic information.
In case of Japan, ASEAN accounted for 16.2 percent of its exports in January, up from 13.4 percent in December 2002, indicating that Japan's export reliance on the region has deepened, given its overall weak export growth following the 2011 earthquake and tsunami.
South Korea has a free trade agreement (FTA) with the ASEAN, which took effect in 2007. But it has not fully tapped the market filled with natural resources and growth potential as South Korea's export competitiveness is being crimped amid the yen's weakening trend, experts say.
"Korea needs to speed up its pace in pursuing bilateral FTAs with member countries of the ASEAN to further tap into the markets," said Myung Jin-ho, an analyst at the Institute for International Trade.
South Korea has been seeking to forge FTA deals with Indonesia and Vietnam in a bid to strengthen its economic ties in the region.