Korea is looking to engage Russia with a new set of foreign and economic policies that it hopes will lead to the restart of their free trade negotiations.

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Tuesday that Korea would need to readjust its foreign and economic policy, and implement so-called “New Nordpolitik” toward Russia.

South Korea’s Nordpolitik was first adopted by the administration of former President Roh Tae-woo to engage communist countries or allies of North Korea, including China and Russia, to boost relations and the South’s world presence. This was also used to bring the North into the international community in the hope of launching inter-Korean dialogue.

Russia offers new growth opportunities to Korea as the world’s largest oil-roducing country is moving to get closer economically with Asia and Central Asia.

Russia’s domestic economic policy includes improving the investment environment and boosting infrastructure development in the underdeveloped parts of the country such as the Siberia region in line with its foreign policy that aims to expand relations with its neighboring countries.

It is also seeking to privatize state assets in sectors such as energy and air transportation, as well as promote the country as one of the world’s top 20 destinations for foreign investment to increase job creation and secure new growth.

Russia is moving to develop new innovative industries such as IT and medicine through increased investments in research and development as the country seeks to diversify its economy that had primarily focused on energy development and exports.

Hyun called on his economic-related ministers to thoroughly prepare for a new phase of Korea-Russia partnerships ahead of a bilateral summit between Korea’s President Park Geun-hye and Russian leader Vladimir Putin in July.

Partnership expansion includes leaving its options fully open to re-launching negotiations with Russia on a free trade agreement, Hyun said.

The two sides began FTA talks in 2008, but Russia unilaterally suspended negotiations as it saw Korea as having the upper-hand in free trade, the Finance Ministry noted.

Bilateral trade increased 116-fold between 1990 and 2012, with Korea exporting goods worth $11.1 billion and importing Russian goods worth $11.4 billion

By Park Hyong-ki (hkp@heraldcorp.com)