Economic cooperation between the Republic of Korea and Hungary started to develop rapidly shortly after the diplomatic relations were normalized between our countries. Hungary was the first country from the so-called „former socialist block” which established diplomatic relations with South Korea, opening her diplomatic mission on the 1st of February, 1989 in Seoul. That move was soon followed by other countries of the Central and Eastern European Region as well as by such major partners for Korea like China and Russia.
Following the regulation of the bilateral relations, the Hungarian-Korean economic cooperation showed rapid growth. In the past two decades Korea and Hungary had developed strong friendly relations in various fields including political, economic and cultural cooperation. The two nations have many similarities in their culture, history and language, which have brought their relations even closer.
The establishment of diplomatic relations had opened the way to concluding a series of important bilateral agreements, from which – in the field of economy - the agreements on trade, avoidance of double taxation and promotion and protection of investments have special importance. In 2005, following the accession of Hungary to EU, the outdated Trade Agreement was upgraded to a new, EU-conform Agreement on Economic Cooperation, while recently a new agreement has been signed on social security aiming at facilitating Korean investments in Hungary.
Trade exchanges between our countries have witnessed a dynamic growth in recent years, as a result of which Korea has become priority trading partner for Hungary in Asia. While the annual trade turnover in the ’80s did not reach the volume of 5 million USD, it has almost reached 2 billion USD in 2014. Most of the Korean export activities cover spare-part supply, not consumable goods. Korean export activities have enriched the Hungarian economy, the balance of trading activities shows significant Korean surplus.
Hungarian export goods represent mainly cars and food products (corn, deep-frozen pork meat), car spare-parts, electronic and electric products, chemicals and pharmaceutical products , machinery and various consumables.
There are further untapped potentials for developing our trade relations. Short term trading perspectives include further increase of agricultural and food products, medicines – including veterinary drugs -, fine chemicals, medical and laboratory equipments, machinery and spare-parts, as well introducing Hungarian wines and various consumables to the Korean market. On medium term basis closer cooperation between Korean and Hungarian institutes and companies in IT sector, biotechnology, logistics, R&D and other related areas, would also contribute to intensifying economic and trade cooperation.
The Free Trade Agreement signed between the memberstates if the EU and South Korea in 2010 and impelemented in 2011 abolished 99% of the custom charges imposed by the EU and 96% of the custom charges imposed by Korea. As for the EU this was the first new generation FTA signed with an Asian country, Korea being the first. The new FTA not only abolishes burdensome custom fees, but also a bunch of similar duties.
Investment relations are another other key area in our bilateral economic cooperation. From the very beginning Hungary had been a favourite destination for Korean investments. Up to 2005 the biggest Korean investor in Hungary was the Samsung-Group. TV sets manufactured at the Samsung plant in Hungary are sold all over Europe.
In 2006 Korea’s biggest tyre manufacturing company, Hankook Tire implemented a 600 million USD project by building a manufacturing plant in Dunaújváros. Together with the plant extensions realized, the total amount of the investment reached almost 1 billion USD.
By the time being the number of Korean companies operating in Hungary is almost 40, the volume of direct foreign investments coming from South Korea exceeds 1,8 billion USD.
Tourism
According to the recent statistics Hungary is getting more and more a favourite tourist destination for Korean visitors, offering a wide range of tourist attractions, including good wines, excellent cuisine, similar to Korean taste, horse riding, golfing, cultural events, like music festivals, hot thermal spas, historical sites and the beauty of nature. 2013 data show a remarkable increase in the inbound tourism from Korea to Hungary counting 50.000 visitors, but amounting only to 70 thousand tourist nights. This figure proves that there is a big development potential in the field of tourism lying dormant yet.
