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Yonhap News Agency - 25 February 2021
S. Korea-Central America FTA set for full implementation in March
By Kang Yoon-seung
South Korea said Thursday its free trade agreement (FTA) with a group of Central American nations will be fully implemented starting next month as Panama completed its domestic procedures.
Asia’s No. 4 economy signed the trade pact with five Central American nations — Costa Rica, El Salvador, Panama, Honduras and Nicaragua — in 2018.
The deal partially went into effect in 2019.
South Korea’s FTA with Honduras and Nicaragua went into effect in October 2019, followed by Costa Rica in November. The deal with El Salvador also officially kicked off in January last year.
Under the agreement, South Korea and the Central American countries will immediately or gradually lift tariffs on more than 95 percent of traded products.
South Korea expects that the FTA will help in expanding shipments of not only automobiles and steel but also pharmaceutical goods and cosmetics products.
The ministry said the latest update is especially significant as South Korea will lift all tariffs on coffee beans from Panama, allowing local foodstuff manufacturers to gain competitiveness in terms of exports.
South Korea, meanwhile, has been making efforts to clinch more FTAs with new partners to ease its heavy dependence on China and the United States, which take up roughly 40 percent of its annual exports.
The move especially became crucial due to the escalating trade tension between Washington and Beijing, with the COVID-19 pandemic also sparking protectionism around the globe.
Seoul currently awaits the official launch of the RCEP later this year, which covers ASEAN and its dialogue partners — South Korea, China, Japan, Australia and New Zealand.
South Korea and Indonesia signed the Comprehensive Economic Partnership Agreement (CEPA) last year, which now awaits parliamentary approval. The CEPA is equivalent to a free trade agreement but focuses on a broader scope of economic cooperation.
It is negotiating with Malaysia and the Philippines as well.
Last year, the country’s outbound shipments came to $512.8 billion, down 5.4 percent from 2019.