By Lee Hyo-sik
Staff Reporter
Korea's trade with Central and South American countries has jumped nearly four-fold over the past 15 years in line with growing bilateral economic ties, the Korea Customs Service (KCS) reported Friday. In particular, the two-way commerce volume has been expanding significantly since the Korea-Chile free trade agreement (FTA) went into effect in 2004.
The Asian nation exports mostly electronics, automobiles and other industrial goods, while importing minerals, wine, and other agricultural products from Chile and other Latin American countries.
Additionally, many local companies have moved into the resources-rich continent, building plants and sales networks, to take advantage of one of the world's fastest growing emerging markets.
With Korea getting closer to signing a free trade pact with Peru and Colombia, the two-way trade is expected to surge even further in the coming years, providing domestic firms with lucrative business opportunities.
The customs agency stated that the bilateral trade volume between Korea and Latin America had reached $38.4 billion last year, up 3.9-fold from $9.7 billion 1994. During the 15-year period, the overall commerce volume of Asia's fourth largest economy expanded 3.5 times to $686.6 billion from $198.4 billion.
Korea shipped goods to Central and South American countries worth $26.8 billion last year, up 420 percent from 6.4 billion in 1994, while its imports grew 350 percent to $11.6 billion from $3.3 billion.
The nation posted a trade surplus of $15.1 billion in 2009, up from $3.1 billion. In 2008, the trade surplus hit an all-time high of $19.5 billion, but following the worldwide economic slump, bilateral commerce plunged in 2009 and as a result, Korea earned less from dealings with Latin America.
``In 2009, the trade volume with Latin American countries declined in the aftermath of the global economic crisis. But we expect it to bounce back strongly this year,'' said Kwon Ki-si, research fellow at the Korea Institute for International Economic Policy.
Kwon said Korean businesses have strengthened their marketing activities over the years to upgrade their brand image and to sell more products in Mexico, Brazil and other Latin American countries.
``A growing number of consumers there purchase Korea-made goods, boosting the nation's outbound shipments to the region. In addition, many local firms have advanced into the continent and established plants, importing parts and intermediate goods from here, which has boosted Korea's export volume. Particularly, the Korea-Chile FTA played a significant role in strengthening the rapidly growing economic ties,'' he said.
By country, Korea's trade with Chile increased by 4.8-fold to $5.3 billion over the 15-year period, while the bilateral commerce with Brazil, the region's largest economy, jumped by 4.9 times to $9 billion from $1.86 billion.
When Korea signs FTAs with Peru and Columbia, the two-way commerce will likely take another leap forward. The trade between Korea and Peru soared 7.1 times to $1.56 billion last year from a rather modest $229 million in 1994.