Republic of Korea country brief

Introduction

Australia and the Republic of Korea (ROK, also known as South Korea) are strong economic, political and strategic partners with common values and interests. People-to-people links between the two countries are increasing and make a significant contribution to the relationship.

Our important economic relationship continues to expand with the signature on 8 April 2014 of the Korea Australia Free Trade Agreement (KAFTA). The ROK is a key market for Australian minerals, energy and travel and education services and Australia is a major market for ROK passenger vehicles, petroleum, and electronic goods and parts. The investment relationship is also growing from a small base.

Australia and the ROK have common strategic interests, particularly in seeking a peaceful resolution to tensions on the Korean peninsula. Both countries have important alliances with the United States and both have made significant and practical contributions to efforts to strengthen regional security and stability, such as sending troops to Afghanistan, Iraq and East Timor and conducting counter-piracy operations. Bilateral relations have strengthened considerably in recent years. Cooperation on international affairs has reinforced the partnership. Australia and the ROK are active members of the G20, Asia-Pacific Economic Cooperation (APEC) and the East Asia Summit (EAS).

History

An independent Korean state or group of Korean states has existed almost continuously for several millennia. Between its initial unification in the 7th century – from the three Kingdoms of Goguryeo, Baekje, and Silla – until 1910, Korea existed as a single independent country. From 1910 to 1945, the Korean Peninsula was subject to Japanese colonial rule. Following Japan's defeat in World War II, Korea was temporarily divided into two zones of occupation, with the United States administering the southern half of the Peninsula and the Soviet Union administering the area north of the 38th parallel. Initial plans to unify the peninsula under a single government quickly dissolved due to domestic opposition and the politics of the Cold War. In 1948, new governments were established in each occupied zone – the Republic of Korea in the south and the Democratic People's Republic of Korea (DPRK) in the north.

From the outset, the ROK and the DPRK operated under vastly different political, economic and social systems. Unresolved tensions created by the division led to the Korean War of 1950–1953, sparked by a DPRK invasion of the ROK. An armistice in 1953 ended the fighting but a more comprehensive peace agreement has not been negotiated. Relations between the DPRK and the ROK remain tense.

Political overview

Government and administration

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

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 do not need to 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. H.E. Ms Park Geun-hye was inaugurated as President of the Republic of Korea on 25 February 2013.

Legislative power is vested in the unicameral National Assembly, comprising 300 members elected for a four year term. This includes 246 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 most recent National Assembly election was held on 13 April 2016.

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

President Park, Korea’s first female president was first elected to the National Assembly in 1998 and was Chair of the Grand National Party (predecessor of Saenuri) from 2004-2006. She is the daughter of former President Park Chung-hee, who came to power in 1961 and masterminded Korea’s economic rise. Domestically, President Park is focused on economic growth, employment and supporting small businesses. In the most recent National Assembly election on 13 April 2016, the ruling Saenuri Party won 122 of the 300 seats, a reduction from the 146 seats it won in the previous National Assembly election (April 2012).

Other provocations in recent years were: its third nuclear test on 12 February 2013; the ballistic missile test on 12 December 2012; the sinking of the ROK navy ship the Cheonan with the loss of 46 sailors on 26 March 2010; the revelation by the Democratic People’s Republic of Korea (DPRK, also known as North Korea) on 12 November 2010 that it had industrial-scale uranium enrichment capabilities; the DPRK's shelling of Yeonpyeong Island in the ROK on 23 November 2010, which left four South Koreans dead and 55 wounded; the news of North Korean leader Kim Jong-il's death in December 2011; and the North's failed satellite launch using a long-range rocket on 14 April 2012.

Foreign relations

Since the Korean War, the ROK has been preoccupied with the military threat from the DPRK and has been closely allied with the United States to guarantee its security. At present, the United States maintains around 28,500 troops in the ROK.

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. This approach was continued by the succeeding Roh Moo-hyun administration (2003–2008). President Lee Myung-bak (2008-2013) took a tougher line on the DPRK, linking economic aid to the need for the DPRK to end its nuclear arms program. President Park’s ‘Trustpolitik’ has strengthened Lee’s approach to relations with the North and has seen the closure of the Gaesong joint industrial complex this year. From August 2003, the ROK participated in Six-Party Talks with the DPRK, the United States, China, Japan and Russia, with the aim of finding a lasting solution to the problems of the Korean Peninsula. See also DPRK country brief.

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 the DPRK. Over time, 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.

The ROK joined the UN in September 1991 (as did the DPRK) and the Organisation for Economic Co-operation and Development (OECD) in 1996. The ROK is a member of the World Trade Organization (WTO), regional fisheries organisations, UN agencies and regional organisations such as APEC, the ASEAN Regional Forum (ARF), the Forum for East Asia – Latin America Cooperation (FEALAC) and the EAS. In 2010, it chaired the G20, culminating in the Seoul G20 Summit in November 2010. It also takes part in the Asia-Europe Meeting (ASEM) and is a dialogue partner of the Pacific Islands Forum. In 2009, the ROK joined the Proliferation Security Initiative. It also joined the OECD's Development Assistance Committee (OECD-DAC) in November 2009, signaling its support for the international consensus on principles of good donorship and aid effectiveness, and hosted the fourth international aid donors' conference known as the High Level Forum on Aid Effectiveness at Busan in November 2011. The ROK hosted the second Nuclear Security Summit in March 2012 in Seoul.

The ROK sees itself as that is well-positioned to play a pivotal role on global and regional issues, such as disarmament and economic governance. It appreciates the benefits of working together with Australia, which it sees as sharing similar values and interests. In this context, the ROK and Australia have come together more recently as members of “MIKTA” (Mexico, Indonesia, South Korea, Turkey and Australia), an informal and non-exclusive group of influential countries cooperating to address diverse international challenges.

Bilateral relations

The first recorded contact between Australia and Korea took place in 1889, when Australian missionaries landed at Busan. Australian photographer George Rose travelled the length of the peninsula in 1904 and photographed the country and people. Today, his images of everyday Korean life, clothing and customs form a valuable part of Korea's documentary history.

George Rose publication

The Australia-ROK 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 and 340 Australians died during the Korean War. Australian veterans of the Korean War travelled to the Republic of Korea for a commemorative mission in July 2013 for the 60th anniversary of the Korean War Armistice.

Full diplomatic relations were established between Australia and the ROK in 1961. The ROK Consulate-General in Sydney (opened in 1953) was elevated to embassy status with a chargé d'affaires from January 1961 and the first ambassador was in place from April 1962 (later, the ROK moved the embassy to Canberra). In June 1962, Australia opened an Embassy in Seoul. Since then, strong economic, political and strategic connections have grown between Australia and the ROK. People-to-people links, supported by a large and growing Australian Korean community, are positive and increasing, and the bilateral trade and investment relationship is complementary, longstanding and robust. Marking the 50th anniversary of diplomatic relations, the Governments of Australia and the ROK designated 2011 as a "Year of Friendship" and links were further enhanced in 2012 by Australia's participation in the World Expo with the theme of "The Living Ocean and Coast" in Yeosu on Korea's south coast.

Development cooperation

A Memorandum of Understanding on Development Cooperation between Australia and the Republic of Korea (ROK) was signed in Seoul on 16 December 2009. This Memorandum provides a framework for greater cooperation on development assistance.

Memorandum of Understanding on Development Cooperation between Australia and the Republic of Korea [PDF 15 KB]

The signing recognises the ROK as an important emerging donor and development partner in Asia and the Pacific. Australia and the ROK have held three High Level Consultations on development cooperation since the signing of the MOU. Both countries are working together to explore ways to develop practical collaboration, with a focus on the Asia-Pacific and strengthened development effectiveness.

Security cooperation

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. Our security and defence ties are expanding: the joint meeting of our foreign and defence ministers in Seoul on 4 July 2013 was the first 2+2 meeting the ROK had conducted with any country, except the US.

Ms Bishop and then Defence Minister, Mr Kevin Andrews, hosted their counterparts Foreign Minister, Mr Yun Byung-se, and Minister for National Defense, Mr Han Min-koo, to the second 2+2 Ministerial Meeting in Sydney on 11 September 2015. At this meeting, the Ministers agreed a Defence and Security Blueprint that implements the agreed Vision Statement. The Blueprint lists areas for practical security and defence cooperation between Australia and the ROK—such as increased joint exercising, military and emergency management cooperation.

Blueprint for Defence and Security Cooperation Between Australia and the Republic of Korea

Australia's security cooperation with the ROK continues to expand in practical ways. Australia contributed to the ROK-led investigation into the 26 March 2010 sinking of the ROK navy vessel, the Cheonan, and, in May 2010, the Australian Army contributed to the ROK military's force preparation for its re-deployment to Afghanistan. Australia and the ROK have also cooperated under the multinational Proliferation Security Initiative (PSI) since the ROK joined the PSI in 2009. In October 2010, Australia sent an RAAF P-3 Orion aircraft and an inter-agency team of officials to participate in the maritime interdiction exercise Eastern Endeavour 2010 hosted by the ROK in Busan. In March/April 2016 Australia sent over 100 ADF personnel to participate in exercise Ssang Yong in the ROK.

Vision statement for a secure, peaceful and prosperous future between the Republic of Korea and Australia

In addition to the 2+2 Ministerial Meetings, security issues are discussed regularly by the two countries, including at Foreign Ministers' consultations, in Political-Military Talks between senior foreign ministry and defence officials, in Defence Policy Talks, and through the relationships that the Australian Defence Force (ADF) staff colleges and the Australian Civil-Military Centre pursue with ROK military staff colleges and institutions. The Royal Australian Navy holds Navy-to-Navy talks with the ROK and makes regular ship visits. HMAS Warramunga visited the ROK in 2010 and two ROK Navy ships visited Sydney in August 2010 to mark the 60th Anniversary of the beginning of the Korean War. HMAS Ballarat conducted a port visit to Busan and took part in the RAN's inaugural bilateral maritime exercise with the ROK Navy, Exercise HAIDOLI WALLABY, on May 2012. The Royal Australian Air Force makes visits to the ROK and holds Airman-to-Airman talks annually. Defence ministers from Australia and the ROK met on 14 December 2011 in Canberra for the first bilateral Defence Ministers' talks. Australian military and civilian personnel participate regularly in joint exercises with the ROK.

Economic overview

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 was comparable with those of the poorer countries of Asia and Africa. Sustained high economic growth since the 1960s, supported by significant US investment, has enabled the ROK's transformation into a highly industrialised and internationally competitive economy.  In 2015, the ROK was the 11th largest economy on a GDP (US$) basis and 13th in PPP terms.  With a population of 50.6 million in 2015, the ROK ranked 31st in GDP per capita terms while on a PPP basis, the ROK ranked 32nd for GDP per capita.

Despite being hit by the effects of the global financial crisis, in 2009, the ROK was one of the few OECD countries besides Australia to record growth and not enter into technical recession. Factors supporting this included the rapid devaluation of the Korean won, providing exporters with a significant buffer, and a series of government fiscal stimulus packages. The ROK economy continues to grow relatively strongly, mainly owing to export demand (52 per cent of GDP in 2014), with average annual growth averaging 3.0 per cent over the past five years. Growth is tailing off – GDP growth was, respectively, 3.3 and 2.6 per cent in 2014 and 2015. The ROK’s growth outlook for 2016 and 2017 is 2.8 and 3.0 per cent respectively.

Long-term, the ROK economy faces the challenge of structural pressures: it has an ageing population and low birth-rate, has low service-sector productivity and faces increasing competition in global markets, particularly from emerging exporters.

Trade and investment

Trade

Australia's trade relationship with the ROK developed rapidly during the 1960s, as the ROK pursued industrialisation requiring large amounts of raw materials. The two countries have historically shared a complementary trade relationship, with Australia providing raw materials, manufactured products and food to the ROK, and importing products such as cars, telecommunications equipment and computers, as well as refined petroleum.

The ROK is Australia's fourth-largest overall trading partner. Two-way goods and services trade was worth around $35 billion in 2014-15, representing 5.3 per cent of all of Australia's international trade. The ROK was Australia's fourth-largest market for goods and services exports combined in 2014-15, totalling $20 billion.

The ROK was Australia's third-largest merchandise export market in 2014-15 ($19 billion, down 9.9 per cent from the previous year). As well as coal iron ore and aluminium, the ROK remains an important market for Australian beef, sugar, medicaments and wheat. The government is pursing initiatives to diversify this relationship.

The ROK is Australia's fifth-largest source of goods and services imports totalling $14 billion in 2014-15. The primary imports from the ROK in 2014-15 were refined petroleum, passenger motor vehicles, and civil engineering equipment and parts. Total bilateral trade in services during 2014-15 was valued at $2.3 billion; services exports being worth $1.6 billion, mostly education-related and recreational travel.

The Korea-Australia Free Trade Agreement (KAFTA) entered into force on 12 December 2014. As a world-class and comprehensive bilateral agreement, KAFTA is one of Australia’s most comprehensive trade agreements, delivering significant improvements in market access and tariff liberalisation for merchandise trade. Under KAFTA, Australian services providers receive the best treatment Korea has agreed with any trade partner. Investment commitments in the Agreement protect and enhance investment in both directions.

Business links are also supported by the Korea-Australia Business Council and the Australia-Korea Business Council. Their annual joint meeting allows members to exchange views and expand private sector links between the countries.

Investment

The level of investment between Australia and the ROK is relatively small but there is scope for stronger investment flows. Korean investment into Australia has grown from a low base in 2004 (A$1.4 billion) to A$23 billion at the end of 2014, but the ROK still only ranks 15th largest foreign investor, representing only 0.8 per cent of Australia’s total foreign investment stock. It is beginning to diversify into other areas such as tourism. Australian investment into the ROK was A$15.5 billion at the end of 2014, representing 0.8 per cent of Australian investment abroad. Korea is the 16th largest destination for Australia’s foreign investment abroad.

Australian financial services providers in the ROK are active in areas such as funds management and infrastructure investment. The ROK’s current account surplus continues to grow and Korean investors are looking for greater opportunities to invest their surplus savings for higher returns overseas. The state-owned Korean Development bank - which has about $US284 billion of assets – on 8 December 2015 opened its first Australian office in Sydney in order to manage its growing Australian portfolio. A higher FIRB threshold under KAFTA may encourage Korean private investment in Australia and the Asia Region Funds Passport will further improve the bilateral investment climate.

In the other direction, major Korean investments have included the $6 billion iron ore project at Roy Hill in Western Australia is the ROK’s single largest foreign investment in Australia, with POSCO holding a 12.5 per cent stake in the project. It is currently Korea’s largest overseas construction project, with Samsung C&T being the lead mine-construction contractor. Other major Korean companies such as Korea Zinc, KOGAS, KEPCO, SK Energy and KORES have also invested in Australia.

The ROK has signed three major LNG contracts to source gas from Australia – with Santos (Gladstone LNG), Total (Ichthys) and Shell (Prelude). When full production commences, these contracts should see Australia provide around 25 per cent of the ROK's LNG, a sharp increase from the current two per cent.

The Prelude FLNG platform, constructed by Samsung Heavy Industries on Geoje Island, will be used in the Browse Basin offshore of Broome in Western Australia allowing natural gas and associated liquids to be extracted, processed and stored at sea, removing the need for pipelines to shore. The Prelude FLNG project is expected to create hundreds of jobs for Australians, as well as contributing significant tax revenues. The project is emblematic of the very complementary economic partnership between the ROK and Australia.

Information on doing business and opportunities in the Republic of Korea

People-to-people and institutional links

Australia’s economic and strategic links with the ROK are underpinned by extensive people-to-people and institutional links. In the 2011 Census, almost 90,000 Australian residents claimed Korean ancestry. The ROK is Australia’s fourth-largest source of international students, with nearly 21,000 full-time students studying in Australia in 2015. The ROK is fourth-largest group of working holiday-makers and ninth-largest market of short-term visitors. The ROK and Japan were the joint-second most popular scholarship host locations for the 2016 round of New Colombo Plan scholarships. Both the active Korean community in Australia and the growing number of alumni in the ROK represent extensive personal connections between Australia and the ROK.

Australian artists, performers and cultural institutions are building links with Korean partners, recognising the strong, distinctly Korean contributions being made to worldwide culture by Korean artists building on their rich cultural heritage and using traditional methods and sophisticated technology.

The ROK has the potential to become a major research partner for Australia, particularly as the ROK focuses on innovation to drive its economic growth. A solid foundation of bilateral cooperation exists, yet there is much scope to increase collaboration, particularly in connecting Australia’s strength in basic research and the ROK’s expertise in applied research and commercialised innovation.

Korean universities are highly regarded internationally for both teaching standards and research achievements. They welcome foreign students, offering courses in both English and Korean across a range of disciplines, and their close links to business can help facilitate internships. The webpage “Study in Korea” provides links to universities.

The Australia-Korea Foundation (AKF) advances Australia’s engagement with the ROK by supporting cultural and academic pursuits, business and community exchanges, and partnerships and collaborations. The AKF board has designated the following longer-term priority areas (2016 -19) for the AKF to ensure alignment with Australian government priorities such as the New Colombo Plan, to enhance economic diplomacy through the Korea-Australia Free Trade Agreement, and to foster cultural, technological and academic links with Korea:

  • Building cultural understanding - Projects developing cross-cultural skills of Australians to effectively engage with Korea and promoting arts exchange of both countries.
  • Trade diplomacy and geopolitics - Projects which assist Australian businesses, including small to medium enterprises, to maximize the opportunities available under KAFTA and under President Park’s structural reform agenda. Projects which strengthen relationships of national professional institutions and facilitate Australian services exports to Korea.
  • Technological and scientific innovation - Projects which establish new partnerships or build on existing collaborations between institutions or peak bodies and their counterparts in Korea, particularly in emerging fields of research and development or where Australia has specific expertise. Of particular interest are projects related to health, aging and social change.
  • Reciprocal Australian and Korean studies - Projects promoting Australian and Korean studies in Australia and Korea including language, literature and society.

People-to-people links have also been fostered through sister-city relationships, such as those between Townsville QLD and Suwon, Parramatta NSW and Jung-gu, Burwood NSW and Geumcheon-gu, and, most recently, Strathfield NSW and Gapyeong County. Sister-state relationships include those between Queensland and Gyeonggi Province, New South Wales and Seoul, South Australia and Chungnam Province, and Victoria and Busan.

High-level visits

Government contacts

Australia-ROK high-level contact is substantial and expanding, with regular meetings and contact between leaders and senior ministers.

Then-Prime Minister, the Hon Tony Abbott MP, met with President Park in Brunei on 9 October 2013 in the margins of the East Asia Summit. Mr Abbott visited the ROK from 8 to 9 April 2014, accompanied by then-Minister for Trade and Investment, the the Hon Andrew Robb MP and a large delegation of Australian political and business leaders. President Park and Mr Abbott took part in a joint press conference, and a vision statement for a secure, peaceful and prosperous future between the ROK and Australia was agreed.

During her first week in office, the Minister for Foreign Affairs, the Hon Julie Bishop MP, met Korean Foreign Minister, H.E. Yun Byung-se, on 23 September 2013 during UN Leaders' Week in New York. They met again in the ROK on 17 October 2013, where she also met with President Park Geun-hye and participated in the Seoul Conference on Cyberspace. Ms Bishop has also met with the Korean Minister for Trade, Industry and Energy, H.E. Yoon Sang-jick, Minister for National Defense, H.E. Kim Kwan-jin and Blue House National security Office Chief, Mr Kim Chang-soo.

Then-Minister for Trade and Investment, the Hon. Andrew Robb met with his counterpart, Korean Minister for Trade, Industry and Energy, H.E. Yoon Sang-jick, on seven occasions: 7 October 2013 in the margins of APEC Trade Minister meetings in Bali; 15 November 2013 in Seoul; 4 December 2013 at the seventh and final round of KAFTA negotiations in Bali; 8 April for the signing of KAFTA in Seoul; 16 May 2014 at the margins of the APEC Ministers Responsible for Trade Meeting in Qingdao; 18 July 2014 at the margins of the G20 Trade Ministers’ Meeting in Sydney and on 2 October 2014 during a trade-promotion visit to Seoul.

Other bilateral visits to the ROK were by then-Defence Minister Mr Johnston on 15 October 2014, Ms Bishop (22-24 May 2015), Mr Ciobo (22-24 April 2015), Mr Frydenberg (9-10 June 2015), Mr Truss (1-5 November 2015), Mr Joyce (13-14 November 2015) and Mr Frydenberg (April 2016).

Ms Bishop and then-Defence Minister, Mr Kevin Andrews, met with ROK Foreign Minister, Mr Yun Byung-se, and Minister for National Defense, Mr Han Min-koo, to the second 2+2 Ministerial Meeting in Sydney on 11 September 2015.

February 2013: Then Governor General, H.E. the Hon Quentin Bryce attended President Park's inauguration.


Last Updated: 6 May 2016