South Korea, Colombia Sign FTA

South Korea’s Minister for Trade Bark Tae-ho and Colombia’s Minister of Commerce, Industry and Tourism Sergio Diaz-Granados formally signed the bilateral free trade agreement (FTA) between their two countries at the South Korean Foreign Ministry on February 21.

1. Previously, South Korea had signed nine FTAs involving 46 countries, eight of which are in force. The FTA with Colombia will therefore be South Korea’s tenth, and its third in South America, after the existing agreements with Chile and Peru.
2. While it is also looking at a further FTA in the region with Mexico, and would like a multinational agreement with Mercosur, the South American common market, South Korea is viewing the FTA with Colombia as being of some importance, given that the latter is said to be emerging as a FTA hub in Latin America due to its active FTA policy, just as South Korea has a similar role in Asia.
3. The South Korea-Colombia FTA is therefore expected to help accelerate South Korean companies’ entry into Colombia and other markets in South America, while increasing bilateral trade due to the countries’ mutually complementary trade structures.
4. Negotiations towards the agreement progressed briskly, with a total of eleven rounds of negotiations held since talks were initiated in 2009. The comprehensive agreement covers such areas as trade in goods and services, customs procedures, technical barriers to trade, trade remedies and intellectual property rights.
5. For example, under the FTA, import tariffs on more than 96% of the goods traded between the two countries will be eliminated over ten years. The agreement should be particularly beneficial for South Korea's vehicle and electronic goods manufacturing industries, which are currently subject to substantial tariffs in Colombia, while, for Colombia, its exports of natural resources, including oil, natural gas, coal and nickel, could find an additional market, as could its coffee and beef exports.
6. Total trade between the two countries nearly reached USD2bn in 2011, but it has been forecasted that trade volumes could show a five-fold increase over the first five years of the FTA’s operation.
7. The South Korean Government has pledged to take follow-up measures, such as submitting the ratification bill to parliament, in order to bring the FTA into effect at the earliest possible date.
8. February 21, 2013
9. Source: Tax News