South Korea and five Central American nations signed a trade deal to lower tariffs and other barriers on a wide range of areas to expand business ties, Seoul's trade ministry said Wednesday.
South Korea inked the free trade agreement with Costa Rica, El Salvador, Honduras, Nicaragua and Panama to ease duties on over 95 percent of goods and open up the service and investment market.
Talks on the pact started in June 2015 and covered 24 chapters addressing goods, service and investment, non-tariff barriers, trade remedies and dispute settlement system.
"South Korea is the first Asian country to strike a trade deal with five Central American nations, paving the way for Korean companies to expand their foothold in the market ahead of their Chinese and Japanese rivals," the Ministry of Trade, Industry and Energy said in a statement.
The Seoul government said the pact would also provide "a third route" to enter the North American market amid rising concerns over the protectionist trade practices by the United States.
South Korea has already implemented FTAs with South American nations, including Chile, Peru and Colombia, as well as with North American nations, including the United States and Canada.
The ministry said it will send the pact to parliament for ratification, aiming to implement it by the first half of the year.
Once implemented, the state-run Korea Institute for International Economic Policy said the trade pact is expected to raise South Korea's real gross domestic product by 0.02 percent and create about 2,500 jobs in the next 10 years.
In 2017, South Korea's exports to the five countries reached
$2.2 billion and imported $333 million worth of goods, according to the Korea International Trade Association. (Yonhap)