Korea expects to benefit from the Regional Comprehensive Economic Partnership (RCEP), if and when it comes about. The Regional Comprehensive Economic Partnership involves ten Asean members and six Asia-Pacific countries – Korea, Australia, China, India, Japan and New Zealand. Negotiations were launched in 2012 and the trade deal is expected to be finalized next year.

If concluded, the RCEP is expected to create the world’s largest free trade area, comprising 49 per cent of the world’s population and a combined gross domestic product of around 25 trillion dollars, which accounts for 32 per cent of global GDP.

South Korea stands to suffer from the trade war escalating between its two largest trade partners, the US and China. Proposed changes to China’s currency and taxation policies may harm Korean exporters. The prolonged trade conflict could cut Korea’s economic growth 0.6 per cent and cost 1,50,000 jobs.

In view of this Asia’s fourth largest economy sees the pact as an opportunity to diversify its export destinations. The pact is expected to create the right conditions for Korean companies to export their products and services to India, which still has low openness to Korea.

Though Korea and India signed a Comprehensive Economic Partnership Agreement in 2009, the utilisation of the trade pact by Korean companies is 67.5 per cent, lower than Korea’s average utilisation rate for FTAs.