AKFTA

ASEAN-Korea Free Trade Area

South Korea is a high‑income developed economy located in Northeast Asia, with a strong industrial base in electronics, automotive, shipbuilding, and advanced technology sectors. It has emerged as one of the world’s leading economies, driven by innovation and global competitiveness.

ASEAN and Korea established dialogue relations in 1989, which were elevated to a Comprehensive Strategic Partnership (CSP) in 2024, reflecting the growing depth and breadth of cooperation between the two sides.

Korea is an important economic partner for ASEAN:

• ranked among ASEAN’s top trading partners and investors
• in 2024, two‑way trade reached US$208 billion
• FDI inflows from Korea amounted to US$7.5 billion.

These figures reflect strong and expanding economic linkages between ASEAN and Korea across trade, investment, and industrial cooperation.

The ASEAN–Korea Free Trade Area (AKFTA) was established following the signing of the Framework Agreement on Comprehensive Economic Cooperation in 2005. This framework laid the foundation for a series of legal agreements that form the core of ASEAN–Korea economic relations:

Key Agreements under AKFTA

• ASEAN–Korea Trade in Goods Agreement (2006)
  Provides for tariff reduction and elimination across most tariff lines over a transition period, enhancing market access and trade flows between ASEAN and Korea.
• ASEAN–Korea Trade in Services Agreement (2007)
  Aims to expand market access for service providers by reducing restrictions across a wide range of sectors, building on WTO commitments.
• ASEAN–Korea Investment Agreement (2009)
  Promotes and protects investment through:
  • fair and equitable treatment
  • full protection and security
  • free transfer of funds
  • compensation provisions in cases of nationalisation or expropriation

The AKFTA has significantly strengthened economic integration by:

• enhancing trade liberalisation
• facilitating regional value chain development
• promoting investment flows and industrial cooperation

ASEAN–Korea cooperation continues to evolve, with ongoing efforts to upgrade the AKFTA to ensure it remains modern, relevant, and responsive to global economic developments.

Beyond AKFTA, ASEAN and Korea continue to deepen cooperation through:

• the Regional Comprehensive Economic Partnership (RCEP)
• ASEAN‑led platforms such as ASEAN Plus Three (APT)

Future cooperation is expected to focus on:

• digital economy
• green and sustainable development
• supply chain resilience
• innovation and emerging industries

Overall, ASEAN–Korea economic relations have developed into a dynamic partnership, supporting ASEAN’s integration into global value chains and contributing to regional growth and resilience.