Source: Business Korea
The Ministry of Trade, Industry & Energy of Korea announced on January 11 that it would hold a public hearing at the COEX Convention Center in Seoul at 10:00 a.m., January 12 with regard to South Korea’s accession to the Pacific Alliance as an associate member.
The Pacific Alliance, consisting of Mexico, Chile, Peru and Colombia, is currently having talks with Australia, Singapore, Canada and New Zealand concerning their associate memberships. The talks started in June last year and are expected to be completed in July this year. Similar talks with other countries are likely to start in August.
For South Korea, an associate membership in the Pacific Alliance is similar in effect to a free trade agreement (FTA) with Mexico. South Korea already signed FTAs with Chile, Peru and Colombia and has yet to do so with Mexico, which is the largest economy in the alliance.
South Korea can enjoy tariff reduction in trade with Mexico once it becomes an associate member of the alliance. At present, small and midsize cars exported from South Korea to Mexico are subject to a tariff of 20% to 30% and the tariff rates are 15% to 20% in the case of TVs, refrigerators and washing machines, 15% for tires, 5% to 15% for synthetic resins and plastic and 3% to 5% when it comes to steel. In addition, Mexico is not a member of the Government Procurement Agreement of the WTO and its government procurement market is open only to FTA partners.
“It is expected that our negotiations with Mexico will take about a year until August or September next year and an associate membership will be obtained with no particular difficulty based on the fact that South Korea already signed FTAs with the other members of the alliance,” the ministry explained.