Trade between South Korea and Colombia could spike after the two countries signed a free trade agreement earlier today.
South Korean President Lee Myung-bak said that once the “win-win” deal is ratified, trade between the countries could increase fivefold, because the FTA will “create an institutional framework and a favorable environment for trade and investment between the two countries.”
The deal will see the elimination of tariffs on 95.1 percent of Colombian goods and 96.7 percent of South Korean goods within 10 years.
Colombian coffee exports and South Korean car and electronics suppliers are expected to benefit most from the removal of duties. Colombia, for example, currently imposes a 35 percent duty on auto imports from South Korea, while 2-8 percent duties are applied to Colombian coffee on entry into South Korea. Both tariffs will gradually be eliminated under the FTA.
China is also looking to bolster its trade with South America. Chinese Premier Wen Jiabao, who is currently touring the continent, said a free trade deal with the Mercosur regional trade bloc has “great potential.”
China is already Mercosur’s second biggest trade partner and a deal could further boost volumes.
“We share ample common interests and we have great potential,” Wen said.
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