Panama, Honduras, Nicaragua, El Salvador, and Costa Rica signed a free trade agreement with South Korea on February 21 with the goal of wider Central American access to Asian markets, including Korean automobiles and electronic goods.
The deal aims to eliminate trade barriers for more than 95 percent of goods and to open service and investment markets, with the Central American countries to receive preferential access in their agriculture, marine, and textile products. It also includes chapters on intellectual property, financial services, rules of origin, and telecommunications.
The trade pact is “an example of how an adequate balance can be found between opening new market opportunities for products and, at the same time, respect the sensitivities of productive sectors,” said the Salvadoran economy ministry in a statement as reported by Tico Times.
South Korea is the first Asian country to sign a trade deal with five Central American nations. Trade Minister Kim Hyun-Jong hopes this will ‘‘cement the road for South Korean companies to expand their presence in that market, ahead of their Chinese and Japanese rivals,’’ according to his office’s statement the day of the closing ceremony in Seoul.
In 2016, Central America imported $1.08 billion from South Korea and exported $143 million to the Asian country.
Guatemala was also involved in the region’s trade negotiations with South Korea, which took over two years and ended in November 2017, but it has not yet reached an agreement with the Asian country. The Guatemalan government is especially concerned with protecting its agricultural and industrial sectors. Belize didn’t take part in the negotiating process.
In coming months, each party’s legislature must approve the trade deal before it comes into effect, which will likely happen at different times for every country depending on its own ratification process.