Until the 1960s, agriculture and fishing were the dominant industries of the economy of South Korea. The fishing industry of South Korea depends on the existing bodies of water that are shared between South Korea, China and Japan. Its coastline lies adjacent to the Yellow Sea, the East China Sea and the East Sea, and enables access to marine life such as fish and crustaceans.
Overview
South Korea’s development of coastal and offshore fisheries began when their exclusive economic zone was declared and settled in 1996 and allowed responsible fishing within the claimed zones. There are four areas of fisheries in South Korea including domestic waters such as coastal and offshore fisheries, distant water fisheries, aquaculture, and inland fisheries. A fishing sector assessment undertaken by the World Wide Fund for Nature in Korea concluded that of these four fisheries areas, there was a total production of 3,135,250 tonnes in 2013. This equated to approximately US$6.46 billion.
South Korea's fishing economy
Gross Domestic Product
The fishing industry of South Korea started to boom after rapid economic growth of Gross Domestic Product (GDP) at a rate of 7% between the 1970s and the 2000s. During 1960s and 1970s, South Korea’s export of fishery products peaked at approximately 17.5% of their total export value, becoming a key driver of the nation's total GDP. In 2001 South Korea’s fishing started to decline as their trade balance became a deficit.
Becoming the 12th largest fishery producer in the world, South Korea accounted for 2.1% of the world’s fish production, reaching 3.1 million tonnes in 2010. In 2008 it was recorded that South Korea’s fishing industry accounted for approximately 0.2% of the national GDP.
Trade Agreements
South Korea’s fishing industry heavily relies on the import and export trades between countries outside of their economy. Since 1978, South Korea began easing import restrictions such as tariffs and import licenses. These barriers to entry was to protect the domestic fishing industry and encourage domestic fishery products to be prioritized, rather than over-relying on imported products.
When importing fishery products into South Korea there is a process in which the National Fisheries Administration assesses the restricted types of fishery products. A few fishery products do not need approval and are accepted into the country without intervention, however some products need approval.
In terms of the South Korea-US relations, the South Korea government has restricted exports such as Alaska groundfish, walleye, pollock, turbot, flounders, yellowfin sole, and halibut. On the other side, commodities such as rockfish, sablefish, and herring are examples of products that are automatically in the approval list.
Introduced and implemented on 15 March 2012, South Korea and the United States of America had signed a free trade agreement. This international agreement enabled both countries to improve their bilateral tariff in order for an increase in free trade. According to the 2016 Aquaculture Research, three years after the introduction of the Korea-USA free trade agreement, fishery products traded increased by 3.5% since 2012.
In recent years, the aggregate value of seafood products between Korea and the USA increased from US$336 million to US$454 million during 2011 and 2014.
Subsidy Investment
Economic incentives of subsidy investment initiated by the South Korea government has improved cash flow for fishing fleets. Without government intervention in the fishing industry of South Korea, the types of fleets including offshore stow netters, offshore jigging vessels and Eastern Sea Trawlers would consequently fall into a negative cash flow. These three out of the 8 fishing fleets studied would result in loss profits. According to FAO, in 1995 the Korean government implemented 10 investment policy sectors totally to US$815 million. These subsidies directly supported sectors such as research and education, aquaculture development and support for crew insurance.