South Korea and Colombia announced Monday they have concluded free trade talks,
a deal Seoul expects will boost auto and other exports to the fast-emerging
market in South America and serve as a foothold for expansion to other parts of
the continent.
South Korean Trade Minister Bark Tae-ho and his
Colombian counterpart, Sergio Diaz-Granados, signed a joint statement declaring
the end of negotiations in a ceremony in Bogota attended by South Korean
President Lee Myung-bak and Colombian President Juan Manuel Santos.
The two sides have held six rounds of talks since late 2009.
"We share
the understanding that the Korea-Colombia FTA is mutually beneficial to both
sides, and that this agreement is a comprehensive and high-quality FTA," the
joint statement said. "We firmly believe that the Korea-Colombia FTA ... creates
an institutional framework and favorable environment for trade and investment
between the two countries."
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Lee hailed the deal as a win-win for both nations.
"We have concluded an FTA through this visit," Lee said during a joint news conference after summit talks with Santos. "The two countries agreed to solidly develop relations in a way that South Korea will treat Colombia as a gateway to South America, and Colombia will treat South Korea as a gateway to Asia."
Lee said the two sides also agreed that increased cooperation between South Korea and Colombia, and cooperation between South America and Asia, will contribute to the global economic recovery.
In an interview with Colombia's leading El Tiempo newspaper published Sunday, Lee said he expects South Korea's trade with Colombia to jump five-fold over the next five years if the pact is implemented.
During the summit, Lee and Santos pledged to take swift follow-up steps, such as a legal review and other procedures needed for a formal signing, so as to put the pact into effect at an early date after winning parliamentary approval in both nations.
Officials said they expect the agreement to go into effect in the first half of next year.
Under the deal, Seoul and Bogota agreed to eliminate tariffs on 96.1 percent of Colombian goods and 96.7 percent of South Korean goods within 10 years after the pact takes effect, officials said.
Colombia, which currently imposes a 35 percent duty on auto imports from South Korea, would scrap all tariffs on South Korean automobiles within 10 years. In particular, tariffs on four-wheeled, diesel-powered vehicles with engine displacements between 1.5 and 2 liters will be eliminated within nine years, officials said.
Colombian tariffs on major auto parts from South Korea, currently at 5 to 15 percent, would also be eliminated either immediately or within five years. Tariffs would end on tires within five years and textiles and clothing either immediately or within seven years, Bark said.
In return, South Korea agreed to eliminate tariffs on coffee imports from Colombia, currently at 2-8 percent, either immediately or within three years, while tariffs on bananas, currently at 30 percent, would be scrapped within five years, Bark said.
Seoul also agreed to eliminate tariffs on boneless meat and four other beef parts within 19 years, with the other beef parts and 153 agricultural items excluded from the tariff elimination list. Tariffs on 284 agricultural products would be scrapped more than 10 years after the pact goes into effect, he said.
"Colombia is an ideal FTA partner for us, considering the complementary nature of the two countries' economies under which we export manufacturing goods and import raw materials and resources, as well as the high tariff rates Colombia imposes on our major export items, such as autos," Bark said during a briefing.
South Korea's trade volume with Colombia amounted to about US$2 billion last year, a small amount compared with other major trading partners. But the country has high growth potential and is considered one of the major emerging markets, along with Indonesia, Vietnam, Turkey and others, officials said.
Colombia is also rich in oil and other natural resources and has been emerging as a free trade hub in Central and South America with aggressive efforts to seek free trade agreements. The country has nine FTAs, including one with the United States, and four more under negotiation.
South Korea is the first Asian nation to have a free trade pact with Colombia.
The deal with Colombia also means South Korea will have FTAs with three of the four nations in the Pacific Alliance, a grouping of Mexico, Chile, Colombia and Peru that seeks free exchange of goods, services, capital and cooperation in energy and infrastructure.