South Korea, Central America Agree Free Trade Deal

by Mary Swire, Tax-News.com, Hong Kong

17 November 2016

On November 16, South Korea and the six Central American states – El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Costa Rica – agreed the details of a free trade agreement (FTA), according to an announcement from the South Korean Ministry of Trade, Industry and Energy.

The Ministry indicated that, over the whole agreement, more than 95 percent of tariffs will be removed over a period of up to 10 years. Each country has negotiated its own list of goods to be included in the FTA, as well as the timing of the consequent import duty reduction schedules.

South Korea's major exports such as automobiles, steel, cosmetics, pharmaceuticals, and home appliances are covered, as are Central America-produced coffee, sugar, and tropical fruits. Very sensitive South Korean agricultural goods, such as rice, are not included.

Negotiations on the FTA only began in June last year, and it is planned to sign its final text in the first half of next year. After signing, the agreement will require parliamentary approval in each country before it can come into effect.

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