Why are Gulf countries strengthening economic cooperation with Korea? 2023/11/11

By: Tae Wan Huh*

Recently, Gulf countries such as Saudi Arabia, the United Arab Emirates, and Qatar, among others, are strengthening economic cooperation with Korea. These countries used to attach great importance to economic cooperation with the United States and Europe, historically and traditionally. However, in order to reform the industrial structure that depends on oil and gas, as well as to successfully prepare for the digital and climate transition, they have chosen Korea as a preferred partner and have strengthened cooperation focused on emerging industries. .

I think that the strategy adopted by the Gulf countries has significant implications for Mexico. Mexico has an economic structure whose dependence on the United States is very strong, although, thanks to the reorganization of the global supply chain and the process of nearshoring, more advantages than disadvantages have been highlighted. However, it is important to remember that the advantages may not last indefinitely, as the global economic and political environment can change at any time. From my perspective, Mexico must take full advantage of this favorable economic condition, not only to benefit, but to counteract the disadvantages inherent to its economic structure.

It is necessary for Mexico to take as a reference the strategy of the Gulf countries, which actively promote economic cooperation with Korea to establish an economic system oriented toward the future. The choice of Korea as a partner by these countries is based on its experience and technology, which enabled the emergence of manufacturing capacity from scratch, as well as its continuous innovation in emerging industry sectors, as evidenced by artificial intelligence, semiconductors, electromobility and renewable energy.

Mexico has solid foundations to position itself as a central country on the American continent, in terms of population, territory, natural resources and manufacturing base. If Korea and Mexico strengthen their current cooperation in emerging industries, highlighting their advantages, Mexico will surely grow as the central manufacturing country with advanced and independent technology. In this way, with this manufacturing base, Mexico would consolidate itself as a key player on the continent.

For economic cooperation between Korea and Mexico to advance substantially in this direction, it is vital to have an institutional basis, in which a bilateral free trade agreement is at the center. Through this treaty, both countries will be able to take advantage of mutual advantages to diversify and strengthen cooperation.

I am completely convinced that the Korea-Mexico free trade agreement will be a determining factor in promoting a favorable turn in Mexico's economy. I hope that Mexico makes a bold decision to drive fundamental innovation in the economic structure, just as the Gulf countries did. Korea will always accompany Mexico on its path to innovation.

*Ambassador of the Republic of Korea