Korea-Russia Trade Volume and Tourists Increase 25 Times in 30 Years Since Diplomatic Relations Established

"Strengthening New Cooperation Such as COVID-19 Response and Building Trust to Prepare for Trade Disputes"

[Asia Economy Reporter Hwang Yoon-joo] This year marks the 30th anniversary of diplomatic relations between Korea and Russia, during which trade volume and tourist numbers have increased 25-fold. Based on the ongoing exchanges between the two countries, there is an analysis suggesting the need for new cooperation measures such as strengthening trust-building and strategies to respond to the novel coronavirus infection (COVID-19).

According to the "30th Anniversary of Korea-Russia Diplomatic Relations: Evaluation and Prospects of Economic Cooperation" report released on the 7th by the Korea International Trade Association's International Trade and Commerce Research Institute, trade between Korea and Russia was only $888.8 million in 1990 during the Soviet era, but surged to $22.34 billion in 2019. The number of mutual tourists, which was around 30,000 in 1990, rapidly increased following the establishment of diplomatic relations and the visa exemption agreement in 2014, reaching a record high of 770,000 in 2019.

With active Korean corporate expansion into Russia, the preference for Korean brands among Russians is increasing. Samsung Electronics ranked first in the Russian mobile phone market in 2019, while Hyundai Motor Group and LG Electronics each secured second place in the automobile and home appliance markets, respectively, gaining great popularity.

The report stated, "Russia hopes for development in the Far East and Siberia and cooperation with the Asia-Pacific region, while Korea seeks stable energy resource procurement and entry into the Eurasian market, aligning their mutual interests," adding, "If energy and logistics projects such as gas pipeline construction, power grid establishment, and railway connections materialize, they will create mutually beneficial economic effects."

However, the report also noted, "Due to the characteristics of the Russian economy relying on resource exports, Korea-Russia trade is highly volatile depending on external environmental changes such as raw material prices and Western sanctions. There are also risk factors such as Korea's consistent trade deficit with Russia since 2009 and the rapid increase in Russia's imports from China," advising, "In the future, complex interests such as Western sanctions against North Korea and Russia, the US-China trade dispute, and the resulting strengthening of China-Russia relations will act as variables. It is also necessary to closely examine the Russian government's import substitution industry promotion policies and the sharp economic downturn in the second quarter caused by COVID-19."

Senior Researcher Kim Hyun-soo emphasized, "To expand economic cooperation between the two countries, it is necessary to promote trade cooperation such as the Korea-Eurasian Economic Union (EAEU) Free Trade Agreement (FTA) and the Korea-Russia Service and Investment FTA, and improve the competitiveness of our companies through localization of manufacturing and production," adding, "We should broaden the exchange platforms among youth, entrepreneurs, and academics to lay the foundation for cooperation, and overcome the internal and external risks faced by both countries based on trust and partnership."

This content was produced with the assistance of AI translation services.