South Korea’s trade ministry said Tuesday that Guatemala has formally signed a deal to join Seoul’s free trade agreement (FTA) with a group of Central American nations.
The inclusion came around three years after South Korea and five Central American nations — Costa Rica, El Salvador, Panama, Honduras and Nicaragua — fully implemented their FTA in March 2021.
“The inclusion of Guatemala, the largest economy of the region, has effectively completed the South Korea-Central America FTA,” the Ministry of Trade, Industry and Energy said in a statement.
South Korea mainly exports automobiles, fabric and petrochemical goods to Guatemala.
Key imports from the Central American nation are agricultural products, including coffee and bananas, along with minerals, such as nickel and carbon.
The state-run Korea Institute for International Economic Policy estimates that the inclusion will help South Korea’s gross domestic production advance by 0.02 percent within five years after the implementation.
“As the two cou
ntries agreed to remove most of the tariffs immediately or gradually, the bilateral business environment is anticipated to improve significantly,” the ministry said.
The trade volume between the two countries came to US$454 million in 2022, down 13 percent from a year earlier.
The agreement, meanwhile, calls for the parliament’s approval. The ministry said it plans to have the deal passed and implemented in the second half of 2024.
Source: Yonhap News Agency