The South Korean parliament passed a free trade agreement with five Central American countries that would start becoming effective from October, giving Asia’s fourth-largest economy an early lead in the regional market ahead of Japan and China.
Korea’s National Assembly on Friday ratified the trade pact with Costa Rica, El Salvador, Honduras, Nicaragua and Panama, capping talks that had started since June 2015. The countries signed the deal in February 2018.
Nicaragua would be the first to open up its market – on October 1 – as it has also finished ratification at home. The other four countries are still awaiting legislative approval.
Korea’s trade ministry on Tuesday held a meeting in Seoul with the ambassadors of the five nations to explore ways to promote trade and investment under the new open market framework.
Korea is the first Asian country to forge a free trade pact with the five countries, giving it a first-mover advantage in the competition against Japan, China and other Asian rivals. With the FTA, it hopes to branch out its trade network across the broader Americas, from Canada and the United States to Peru, Chile and Colombia.
To further trade ties with the region, Korea plans to follow up with various business summits, investment workshops and professional gatherings.
The FTA with Central America would help bring relief to Korea’s trade-driven economy by opening up new markets and diversifying its export portfolio amid the protracted U.S.-China trade war and Japan’s tightened export restrictions on Korea, the trade ministry said.
By Lim Sung-hyun and Kim Hyo-jin
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