KEY POINTS:
South Korean companies are eyeing the investment potential of prime New Zealand resources as both countries prepare to start bilateral free trade negotiations.
South Korean Foreign Minister Yu Myung-hwan, who recently held talks with Foreign Minister Murray McCully, notes that "investment in New Zealand natural resources is very promising".
The upcoming FTA negotiations - expected to kick off in the first half of 2009 - will primarily be focused on deepening bilateral trade in goods and services.
Yu emphasises that the two economies are "very complementary". South Korea imports many of the agricultural products that New Zealand produces, and New Zealand imports products that South Korea specialises in such as manufacturing household items like TV sets.
But an investment chapter is also expected to be included in the FTA, following the model set by last year's historic China-New Zealand trade deal.
"Many Korean companies are competitive and want to come to New Zealand and do business here," says Yu.
Hyundai Hysco joined the hunt for oil and gas in the deepwater Taranaki Basin last year when it signed a contract to participate in the exploration permit held by Global Resource Holdings. The SK Energy conglomerate, which specialises in energy and resources development, is also keen to invest here, says Yu.
Diplomatic sources suggest the formal FTA launch may be linked to a possible visit by South Korean President Lee Myung-bak.
"I really want to bring my President to this region," said Yu. "New Zealand is a really important partner to Korea. I want to remind everybody that New Zealand and Australian troops took part in the Korean War and we fought shoulder to shoulder."
South Korea took a strategic decision this year to fight off growing international protectionism by expanding its bilateral free trade agenda to include countries such as Australia, New Zealand and several Latin American countries.
It has already ratified a deal with the United States which still awaits sign-off from the US Congress, and is in the final straits of securing agreements with India and the European Union.
The urgency of South Korea's trade push was underlined this week by the release of figures showing its economy had plunged further into recession after a record export contraction in January.
Lee has since called for "emergency" strategies to boost exports against an International Monetary Fund warning that South Korea's economy would contract 4 per cent this year.
