Korea takes first step in trade, investment with South American bloc

By Shin Ji-hye

Trade agreement is predicted to raise Korea’s GDP by up to 0.43 percent by 2035

  • Published : Sept 10, 2018 - 14:23
  • Updated : Sept 10, 2018 - 14:24

Korea is slated to start the first round of negotiations on a trade agreement with South American bloc Mercosur on Tuesday, in its first step in expanding trade and investment in the newly emerging market, according to officials Monday.

The negotiation is a follow-up measure to the ministerial meeting in May, where trade ministers from Korea and Mercosur, an economic bloc comprised of Argentina, Brazil, Paraguay and Uruguay, jointly announced they would begin talks on a trade agreement.

This week’s meeting -- held in Uruguay’s capital of Montevideo for five days -- is attended by Kim Ki-joon, the Trade Ministry’s director general for free trade agreement negotiations, with representatives from the ministries of industry, finance, agricultural and fisheries.

For the Mercosur side, participating members are Valeria Csukasi, director general of Uruguay’s Foreign Ministry, Victorio Carpintieri, undersecretary of Argentina’s Foreign Ministry, Andre Odenbreit Carvalho, director general of Brazil’s Foreign Ministry and Juan Angel Delgadillo, vice minister of Paraguay’s Foreign Ministry.

During the meeting, the representatives of Korea and Mercosur are slated to have a dialogue on goods, services, investment and e-commerce, technical barriers to trade, competition, government procurement, sustainable development, cooperation and solution of conflict. 

A signing ceremony in May by trade ministers of Korea and Mercosur for joint statement to start negotiation on trade agreement (Ministry of Trade, Industry and Energy)

“We will make our best efforts to improve trade and investment environment in the South American region through the trade agreement with Mercosur nations for the rise of export and investment for Korean companies in the region,” said director general Kim.

The trade agreement with the Mercosur nations, if it takes effect, is expected to be a new opportunity for the Korean businesses struggling from growing protectionism and trade disputes from its largest trade partners, the US and China.

The new economic bloc has a combined population of 290 million and combined gross domestic product is $2.8 trillion. It has barely signed trade agreements with other key nations, keeping high tariff and non-tariff barriers.

When the trade agreement comes to effect this year, Korea’s gross domestic product is predicted to increase by up to 0.43 percent by 2035, according to Seoul’s Trade Ministry.

During the period, Korea’s export to the Mercosur nations is expected to rise by $2.4 billion mainly in the areas of automobile, car parts, electronics and steel. Korea’s imports from the region are also predicted to rise by $1.2 billion, mainly in the areas of corn, leather products, petrochemical products, leaf tobacco and poultry.

By Shin Ji-hye (