Korea starts FTA talks with 6 Central American nations

The Korean government has started Free Trade Agreement negotiations with nations in Central America.

Korea’s Trade, Industry and Energy Ministry announced in Houston, the U.S., on Thursday an official commencement of FTA negotiations between Korea and Central America at the trade ministerial meeting with counterparts from Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. These six nations are members of the Secretaria de Integracion Economica Centroamericana (SIECA), a regional bloc for economic cooperation formed in 1960, which has already signed FTAs with the U.S. and the E.U.

“Central America region is a geo-political strategic point that connects North and South Americas. Attentions are paid to the region, which consists of new emerging markets. The deal is expected to bring about various benefits to Korea, including trade expansion through FTA and domestic business’ participation in the local regional development projects,” said the ministry official.

Last year, the combined gross domestic product (GDP) of six Central American nations was 209.8 billion dollars, which is at the similar level to Chile’s (264.1 billion dollars) and around one fifth of Korea’s. If the FTA is concluded, the Korean government expects exports of Korean automobiles and car parts to grow and import prices of local coffee and clothes to go down. At the ministerial meeting, Korea proposed forming a taskforce organization to facilitate business cooperation between Korea and Central America, along with FTA negotiations, to discuss improvement of trade and investment conditions, and Korean companies’ participation in local development projects of Central American nations.

january@donga.com