As it stands, Ireland’s most important trading and investment partner is the United Kingdom. This has been the case since Independence although the balance has shifted greatly since Ireland entered the EEC in 1973 with the UK no longer wholly dominant despite our reliance on the UK in certain sectors such as beef, timber, pork and much more.
As Ireland’s reliance on the UK as a partner has diminished, it has been able to look to a wider market largely thanks to membership of the EU both in terms of exporting to EU Member States as well as using EU trade deals to export to third parties.
Following the UK’s decision to leave the EU and the election of Donald Trump as President of the US with a far more protectionist outlook, Ireland must now use its EU membership to develop new markets and make the most of trade deals.
In Ireland’s efforts to diversify its trade links post-Brexit, South Korea constitutes an important destination for Irish exports and source of foreign investment. South Korea is Asia’s fourth largest economy and has the 15th largest economy globally. Ireland and South Korea followed somewhat similar economic trajectories: Just like Ireland was able to develop from a relatively poor country into one of the world’s most prosperous states during the Celtic Tiger, South Korea, the ‘Miracle on the Hangang River’, managed to experience rapid growth and to develop from a comparatively backward country into an Asian economic powerhouse. While South Korea’s GDP was at similar levels as Ghana’s in the aftermath of the Korean War in the 1950s, South Korea is now home to some of the world’s leading telecommunications equipment, automobile, chemical, ship and consumer electronic product companies. Global brands such as Samsung, LG, Hyundai and Daewoo have been crucial in transforming South Korea into one of Asia’s most developed countries with an unemployment rate of just 3 per cent. The Samsung Group alone makes up about 20 per cent of South Korea’s economic output and employs more than 270,000 people around the world. South Korea weathered the financial crisis quite well and has experienced one of the highest OECD growth rates over the last decade.
South Korea is globally leading in broadband internet penetration and significant growth areas in South Korea include IT and digital technology, life sciences and healthcare, industrial electronics, clean tech and renewable energy. South Korea’s economy is very integrated into the international system and has the world’s fifth largest export economy with electronic equipment, vehicles, mineral fuels and oil as well as machinery constituting the country’s main exports. It is ranked 7th for ease of doing business globally.
Economic relations with South Korea have become increasingly important for Ireland. Exports from Ireland to South Korea are worth €590 million. While trade with South Korea dipped during the economic crisis, economic relations recovered well and have experienced significant growth with the services sector performing particularly well. The reopening of IDA Ireland’s office in Seoul in 2012 and the expansion of Enterprise Ireland’s presence in 2014 are testament to this strengthening of our economic ties with South Korea. Irish state agencies in South Korea focus on promoting trade in medical and pharmaceutical products, internationally traded services, life sciences, the agri-food sector and engineering in particular.
The EU-Korea free trade agreement, which is the EU’s first trade deal with an Asian country and goes further than any previous agreements in lifting trade barriers, provides a valuable framework for further strengthening and developing Ireland’s economic relationship with South Korea as it gives exporters from Ireland and other EU member states a competitive advantage in accessing the South Korean market. Since the free trade agreement came into force in 2011, duties on industrial and agricultural goods have been removed following a step-by-step approach. The agreement also includes provisions in areas such as government procurement, competition policy, sustainable development, transparency in regulation and intellectual property rights.
Our relationship with South Korea is strong and positive and has the potential to become even more important as it offers a growing number of opportunities for trade and investment. In 2013, Ireland and South Korea celebrated the 30th anniversary of bilateral diplomatic relations and acknowledged the contribution of men of Irish birth and heritage who fought in the Korean War.
Ireland’s exit from the EU/IMF bailout resonated in South Korea, which itself had to go through an IMF programme in the 1990s, and South Korea has welcomed our country’s return to strong economic growth and stability. Both South Korea and Ireland have demonstrated that small and formerly relatively poor countries can make a difference and become economic success stories. The South Korean market has huge potential and offers many opportunities for Irish businesses to expand. Developing our economic links with Korea is an important part of Ireland’s effort to diversify its trade by tapping into new markets which is of crucial importance to Ireland in the aftermath of the Brexit referendum.
We will never have a better trading partner than the UK nor will we ever replace its preeminent role in Irish commerce but it is vital that we seek to further our economic ties with countries all around the world.
Senator Neale Richmond is the Fine Gael spokesman on EU Affairs in Seanad Éireann.