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South Korea Looks For FTAs In Central America

by Mary Swire,, Hong Kong

06 July 2010

South Korea’s President, Lee Myung-bak, has held recent meetings with the leaders of Panama and the other countries in the Central American Integration System (SICA), Colombia and Mexico, and has attempted, with each, to progress discussions on bilateral free trade agreements (FTAs).

President Lee was the first South Korean president to make a state visit to Panama since the two countries established ties in 1962. Panama is South Korea’s biggest trade partner in South America.

After the meeting with Panama’s President, Ricardo Martinelli, President Lee also attended the third South Korea-SICA (Central American Integration System) meeting. SICA was established to encourage economic cooperation between Panama, Belize, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.

The two presidents confirmed the necessity of concluding a bilateral FTA. Both also agreed on the beneficial effects which would emanate from a double taxation agreement (DTA) in furthering bilateral trade and investment, particularly as South Korea was interested in participating in the development of mineral resources in the country and construction projects.

It was decided that the FTA should be concluded as soon as possible, and that the participation of the other countries in Central America should be sought. Such a participation formed part of President Lee’s discussions with SICA, as a way to expand regional cooperation on a practical level.

While he was in Panama, President Lee also met with the President of Colombia, Alvaro Uribe. They agreed to accelerate talks for an FTA, and to continue to explore other measures to enhance cooperation in bilateral trade, such as a DTA, an economic development cooperation fund and an investment protection treaty.

In fact, President Uribe said that he hoped it would be possible to sign the investment protection treaty before he leaves office on August 7, while the FTA would be signed by the new President, Juan Manuel Santos Calderón.

Finally, President Lee then travelled for meetings in Mexico with President, Felipe Calderon, where both men agreed to press for a resumption in negotiations for the bilateral FTA which had stopped in 2008. With trade between the two countries said to be more than USD8bn in 2009, it is hoped that the reticence of the Mexican business sector to the conclusion of an FTA can be overcome.

In an interview, President Lee tried reassure Mexican businesses that South Korean products, under a future FTA, would be more likely to compete with other foreign imported goods, rather than with their domestic sales.

TAGS: tax | free trade agreement (FTA) | double tax agreement (DTA) | Nicaragua | law | Belize | Colombia | Mexico | agreements | Costa Rica | Dominica | Dominican Republic | Guatemala | Korea, South | trade | El Salvador | Honduras | Panama

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