Guatemala to join South Korea-Central America FTA

By Mayora IP

South Korea's trade ministry said it is currently under negotiations with Guatemala to invite the Central American country to a multilateral trade pact that fully went into effect this year.

Trade Minister Yeo Han-koo met his Guatemalan counterpart, Antonio Malouf, in Seoul to discuss Guatemala's entry into the free trade agreement (FTA) between Asia's No. 4 economy and a group of Central American nations.

South Korea and five Central American nations -- Costa Rica, El Salvador, Panama, Honduras and Nicaragua -- fully implemented their FTA in March 2021.

Guatemala was also initially among dialogue partners, but it stepped out during negotiations.

Under the deal, South Korea and Central America agreed to eliminate tariffs on 95% of goods made by each side within the next ten years. The deal also provides Korean companies such as KOGAS and POSCO with opportunities to cooperate with the Central American governments on major energy and infrastructure projects.

While Asia’s fourth-largest economy diversifies its export portfolio, Korean consumers will gain access to agricultural products and consumer goods free of tariffs. In exchange, Central American economies will gain access to vehicle parts, medicines and industrial components related to the fourth industrial revolution such as artificial intelligence and e-commerce.