A Free Trade Agreement (FTA) between Mexico and South Korea would allow for a better balance in the mutual granting of tariff advantages, argued the Mexican government.
Product imports to Mexico from South Korea were US$18.963 billion in 2021, a year-on-year growth of 29% and an all-time high.
Conversely, Mexico’s merchandise exports to the South Korean market totaled 3,0308 million dollars in 2021, a 4% decline at an annual rate.
In addition to the bilateral FTA, the two nations are currently negotiating South Korea’s entry, as an associate state, to the Pacific Alliance, made up of Mexico, Colombia, Chile and Peru.
At a press conference held this Tuesday, Luz María de la Mora, Undersecretary of Foreign Trade of the Mexican Ministry of Economy, highlighted that this Asian country is Mexico’s third largest trading partner and has 52 million inhabitants with a GDP per capita of 31,000 dollars.
FTA
She also informed that some 2,000 South Korean companies operate in Mexico, while South Korea ranked ninth among the world’s largest importers in 2021, has invested 8 billion dollars in Mexico, with a «growing and dynamic» trade relationship and is a prominent player in global value chains.
However, De la Mora argued that 85% of the value of Mexican imports from South Korea do not pay tariffs, either because Mexico unilaterally applies a zero tariff or because of temporary imports, through programs such as IMMEX, Prosec or Rule Eight, for example.
In contrast, only 20% of Mexican exports to the South Korean market pay no tariffs and another 68% pay tariffs of more than 5%; in some cases, agricultural products have tariffs of up to 800%.
Regarding FTA negotiations between Mexico and Ecuador, De la Mora said that they are «close» to completion.
Mexico is also negotiating the extension of trade agreements with Brazil, Argentina, Canada, New Zealand, Australia, Israel and the European Free Trade Association.
On January 26, 2022, the Pacific Alliance, of which Mexico is a member state, concluded a Free Trade Agreement with Singapore. The Free Trade Agreement will enter into force upon ratification by each of the legislative bodies of Mexico, Chile, Colombia and Peru.
