ASEAN Economic Issues (January 2025)Trade & Investment Unit, ASEAN-Korea Centre

1. Korea’s Trade to ASEAN Countries (as of 2024)

Unit: 1 million (USD)

Country/Region	December 2024			December 2023	2024
	Export	Import	Total	Total	Total
Total (Korea)	61,369	54,877	116,246	110,696	1,315,792
ASEAN	9,635	6,705	16,341	15,928	465,729
Brunei Darussalam	15	82	98	122	573
Cambodia	56	41	97	85	1,163
Indonesia	626	874	1,500	1,771	20,513
Lao PDR	12	9	20	17	201
Malaysia	803	1,322	2,125	2,268	24,425
Myanmar	28	30	58	56	886
Philippines	811	279	1,090	974	14,673
Singapore	1,743	1,048	2,791	2,752	28,777
Thailand	613	565	1,178	1,148	14,853
Vietnam	4,929	2,455	7,384	6,735	86,762
China	11,794	12,383	24,176	21,752	272,904
Japan	2,637	4,476	7,114	6,407	77,505

Reference: Korea Customs Service

2. Korea’s Overseas Direct Investment to ASEAN (2024 Q3)

Reference: Korea Eximbank

2. ASEAN Economic Integration Brief (ASEAN Secretariat) (Link)

The ASEAN Secretariat announced the release of the 16th issue of the ASEAN Economic Integration Brief (AEIB), offering insights into ASEAN’s economic integration progress and priorities. H.E. Ekkaphab reflects on the deepening synergy between ASCC and ASEAN Economic Community (AEC) initiatives, emphasizing their collaboration in addressing critical regional challenges such as digital transformation and climate change.

▷ Driving Synergy and Collaboration across ASEAN Community Pillars

H.E. Ekkaphab Phanthavong, Former Deputy Secretary-General of ASEAN for the ASEAN Socio-Cultural Community

Both ASCC and AEC recognize the potential of digital technologies to accelerate growth and improve people’s lives. For ASCC, the focus has been to push for initiatives to build the digital literacy of children and youth, upskill and reskill workers to prepare them for the changing world of work, expand the digital participation of the ASEAN population, and create a safe and socially responsible online environment.

For example, the ASCC has issued the following: (1) Declaration on Digital Transformation of Education Systems in ASEAN, which promotes optimizing digital technologies for teaching and learning; (2) Declaration on Human Resources Development in the Changing World of Work, which supports lifelong learning and developing skilled and agile workforce; and (3) Declaration on Promoting Competitiveness, Resilience, and Agility of Workers for the Future of Work which commits to a human-centred approach in preparing workers for transformational change in the workplace. These efforts complement the work of the AEC in addressing the shortage of digitally skilled workers across all economic sectors and developing a technologically-savvy and innovative population to bolster the economy.

The ASCC and AEC also realize the existential threat posed by climate change and are working to curb greenhouse gas emissions and stave off its worse effects. As one of the ASCC’s efforts, ASEAN prepared the ASEAN State of Climate Change Report, which identifies opportunities for collaboration in ASEAN to meet the target of net zero by 2050. ASEAN also prepared the report, Investing in Sustainable Natural Capital in ASEAN, which seeks to encourage Member States to upscale, monitor, and measure the impact of their nature-based solutions.

ASCC’s initiatives parallel AEC’s ongoing work to achieve a carbon-neutral future. As such, the ASCC remains steadfast in its commitment to ensuring that any policy- or standard-setting and knowledge-sharing activities always include or consider the perspective of the other pillars of ASEAN cooperation. This inclusive approach is crucial as regional challenges become increasingly complex, and ASEAN needs to ramp up cross-pillar collaboration for harmonized activities that lead to more meaningful development.

▷ Unlocking ASEAN’s Potential: How the ASEAN Services Facilitation Framework is Driving Competitiveness and Growth

KAFI ADI PRASETYA and NURUL IMLATI, Services and Investment Division

The ASEAN Secretariat’s Services and Investment Division provide an in-depth exploration of the ASEAN Services Facilitation Framework (ASFF). This transformative initiative aims to modernize ASEAN’s services sector by focusing on key strategic pillars, including regulatory transparency, talent mobility, digital innovation, and sustainability. Their analysis highlights how the ASFF is poised to boost the region’s services sector competitiveness, resilience, and readiness for the future.

The services sector is rapidly becoming the backbone of ASEAN economies, with its share of GDP reaching an impressive 53.9 percent in 2022. This growth underscores a strategic opportunity for ASEAN Member States to tap into the sector’s vast potential for driving economic progress. At the heart of this effort lies the recently adopted ASEAN Services Facilitation Framework (ASFF), a milestone agreement unveiled at the 30th ASEAN Economic Ministers (AEM) Retreat in March 2024. Whilst non-legally binding, it encourages AMS to adopt various measures that: (1) boost cross-border trade and investment in services; (2) ease domestic barriers to trade and investment; and (3) cultivate a favorable, predictable environment for international trade and investment. The ASFF is built on five strategic pillars that aim to transform ASEAN’s services economy as belows:

The potential benefits of the ASFF are immense. A study by the OECD indicates that the implementation of ASFF could lower average trade cost by 9 percent of export values for ASEAN companies. The ASFF also resonates with the WTO’s Services Domestic Regulation Joint Initiative that was concluded in 2021, which is expected to reduce global trade costs by over USD 125 billion.

In sum, the ASEAN Services Facilitation Framework signals ASEAN’s commitment to boosting services trade and investment and minimizing barriers within the region. Through both collective and domestic actions, ASEAN is well positioned to unlock new economic opportunities, and build a resilient and interconnected services economy. As ASEAN takes these steps, the message is clear: the region’s future is bright, competitive, and ready to lead on the global stage.

3. Korea’s Strategic Partnership with Malaysia and the Philippines (Korea Institute for International Economic Policy) (Link)

▷ South Korea and Malaysia have elevated their bilateral relations to a Strategic Partnership this year ahead of the 65th anniversary of diplomatic relations in 2025, and South Korea and the Philippines established a Strategic Partnership to mark the 75th anniversary of diplomatic relations this year.

▷ With both Malaysia and the Philippines actively planning export-led growth strategies to overcome low growth and middle-income trap countries, the expansion of bilateral trade by improving the trade environment could bring about increased welfare for both countries.

• Malaysia’s Anwar administration, which sworn in November 2022, has officially presented Malaysia’s New Industrial Master Policy 2030 (NIMP 2030) and the Philippine government has implemented the mid-term development plans, Philippines Development Plan (PDP) 2023-2028, and Philippines Export Development Plan (PEDP) 2023-2028.
• Comparative advantage items in Korea, Malaysia, and the Philippines suggest that further trade expansion between three countries can contribute to providing more affordable options for consumers/companies involved in the country and is likely to make a positive impact on welfare economics.

▷ South Korea’s investment in Malaysia has been on the rise recently while investment in the Philippines has been sluggish, as Malaysia has been attracting attention as an alternative production base under escalating tensions between the U.S. and China.

• [ROK-Malaysia] The private sector focusing on hydrogen, CCS (Carbon Capture Utilization and Storage, and electric vehicle batteries is actively entering Malaysia, and cooperation in key minerals and defense sectors is expected to expand in the future between the two ministries.
• [ROK-Philippines] Cooperation between South Korea and the Philippines may lead to benefits of in core minerals (relaxation of mining-related regulations in the Philippines), nuclear power plants (expansion of demand for nuclear power plants in the Philippines), and defense (modernization plans of the Philippine military).

▷ With the establishment of a strategic partnership, Korea can advance economic cooperation with Malaysia and the Philippines.

• [ROK-Malaysia] In the bilateral FTA negotiations resumed this year, it is necessary to actively reflect the market opening and easing of non-tariff barriers in the new trade sector, which the two countries are already participating in, while strengthening core mineral and defense cooperation in the wake of the elevation of diplomatic relationship.
• [ROK-Philippines] It seems indispensable to expand Korea’s import items/scale to the Philippines so that bilateral trade can become a platform for mutually beneficial economic cooperation, and it is required to elaborate people-to-people exchanges between to solve the labor shortage caused by Korea’s low birth rate and aging population.

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ASEAN Economic Issues (January 2025)

1. 2024년 전체 수출입 동향

단위: 백만 불

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