South Korea will enter trade agreement with South American trade bloc Mercosur to remove trade barriers in goods and service as well as create opportunities for companies.

A delegation of South Korean government will hold the first official round of talks for trade agreement with the representatives of four Mercosur member countries - Brazil, Argentina, Paraguay and Uruguay - in Montevideo, Uruguay on Sept. 11-15 (local time), the Korean Ministry of Trade, Industry and Energy said on Monday.

Mercosur, officially Southern Common Market, is an economic bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela. But Venezuela`s membership was suspended in 2016 for failing to comply with trade obligations.

The trade negotiation talks will cover all areas from lowering trade barriers in goods and services to boosting bilateral cooperation and settling trade disputes.

Mercosur has a total population of 290 million and its economic size is estimated at $2.8 trillion. It accounts for 70 percent and 76 percent of South America’s total population and gross domestic product, respectively, according to the trade ministry. The common market remains closed and lacks free trade agreements with major economies.

The Korean government expects that the trade agreement with Mercosur would not only enhance Korean companies’ presence in the region but also allow it to expand its trade network beyond North and Central Americas.

According to a study by Inha University, Korea’s exports to Mercosur states would grow by $2.4 billion every year from a trade pact.

By Ko Jae-man and Cho Jeehyun

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