By Mark Tokola

The Republic of Korea and the State of Israel have a lot in common: both were founded in 1948, both had to fight for their early existence, both have succeeded despite a lack of natural resources, both are lively democracies, and both are among America’s closest allies. On May 14th, the anniversary of Israel’s declaration of statehood, it is worth noting the developing relationship between the two countries. Along with the historic parallels, Korea and Israel continue to share characteristics that draw them together: both continue to live with significant threats to their security, both emphasize the importance of education and technical prowess, and their standards of living are similar with per capita GDPs exceeding $25,000. Despite the geographic distance between them, it is unsurprising that Korea and Israel are looking towards negotiating a Free Trade Agreement. On January 6, 2016, the Korean Ministry of Trade, Commerce and Economy held a public meeting in Seoul of over 100 government and industry officials to discuss the potential benefits and economic impact of an FTA with Israel.

Relations between Korea and Israel did not have the smoothest of starts. In 1950, at the outbreak of the Korean War, the United Nations Security Council called on member states to assist in the defense of South Korea. Israel, which had joined the UN in 1949, held a debate in its parliament, the Knesset, regarding how to respond to the appeal. The Knesset debate actually turned on the question of which Korea Israel should support. Left-wing parties in the Knesset argued that Israel’s sympathy should be with their Socialist brethren in North Korea rather than with the Western-oriented, capitalist, South. In the end, the government of Israel decided to support South Korea and sent food and medicine, but not troops, to South Korea. Israelis today point to the Korean War debate in the Knesset as a turning point in Israel’s foreign policy, the moment when a decision was taken to ally with the democratic West.

In the decades following the Korean War, South Korea’s relations with Israel were marginal until 1992 when Korea opened its embassy in Tel Aviv and Israel opened its embassy in Seoul. If that sounds late in history, it is worth remembering that the Republic of Korea only attained United Nations membership in 1991.

Since 1992, trade between Israel and Korea has grown from around $600 million in 1998 to over $2 billion in 2015. Samsung and LG have opened research facilities in Israel and the “Korea Israel Research and Development Foundation,” founded in 2001 to support joint research and development projects between Israeli and Korean companies, has supported over 130 joint projects. It is not all about technology, since 2006 Israeli audiences have had the pleasure of watching Korean TV dramas.

In 2009, Korea and Israel agreed to conduct a joint feasibility study on concluding a Korea-Israeli Free Trade Agreement, the latest step of which was the January 6 Seoul meeting described above. The Korean Ministry of Trade, Commerce, and Economy has assessed that the FTA would have a positive effect on Korea’s gross domestic product and consumer welfare. The Ministry specifically highlighted that Korean agriculture would benefit from benchmarking Israel’s agricultural policies, which have adapted to environmental challenges. The Korea-Israel FTA might take a while, given that Korea is currently conducting eleven FTA negotiations. The potential Korea-Israel FTA is in the category of “FTAs under consideration,” but it is in good company. The other three FTAs in that category are with MERCOSUR, Central America, and Malaysia.

But, FTAs aren’t everything and even while waiting there is potential for more bilateral trade and investment between Korea and Israel. One indication of that is the Bloomberg Innovation Index which ranks Korea number one in the world, with Israel in an impressive fifth place, just ahead of the United States. On the index of “Postsecondary Education,” Korea is number one, while Israel is number four. An on the ranking of “Research and Development,” Korea is number one, while Israel in number two. These are two countries that are not only similar, but clearly doing something right. It would be surprising if their relationship did not flourish.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Dave Lichterman’s photostream on flickr Creative Commons.