This is the perfect moment for Mexico and Korea to begin dialogues and negotiations for the Tratado de Libre Comercio (Free Trade Agreement), which will allow for the increase of commercial exchange between the two countries. The agreement also aims to make Mexico and Korea the two countries that unite the American and Asian continents.
South Korean Ambassador in Mexico, Chun Beeho, said that during Korean president Park Geun-hye’s visit to Mexico from April 2-4, it will be necessary to put everything on the table, so that in the near future, agreements can be made.
Bilateral trade reached $14.4 billion in 2015, in which Mexico was the top business partner in Latin America for South Korea and South Korea was the sixth business partner for Mexico.
In regard to direct investments by Korean businesses, at the end of last year, $5.2 billion dollars were accumulated.
Beeho said that a few years ago China was the biggest production platform for multinational businesses, however with the uncertainty of the world economy those companies are looking for new places to sell their products.
The diplomat said that currently, U.S. and European businesses have the majority of direct investments in Mexico, but that Asian businesses are always looking for new platforms for their products.
India, Indonesia, Vietnam and Mexico could be the new destinations.
The majority of Mexican exports are destined for the United States, with 85 percent in 2015, while only 1.3 percent went to China, 0.8 percent to Japan and 0.7 percent to South Korea.
This means that when considering the structure of Mexico’s exports, it is necessary that the country diversify its destinations and “realize the potential that it has to offer to international investors,” Beeho said.
However, he said that these investments have halted when faced with the lack of legal proceedings that guarantee the promotion and production of direct foreign investments between the two countries.
Last February, Mexico joined with 11 other countries to sign the Trans-Pacific Partnership (TPP). South Korea wanted to join, but given the upcoming U.S. presidential elections, the Asian country is unsure that the U.S. administration will ratify the agreement.
Mexico is a trading hub on the American continent, with 15 free trade agreements with 45 different countries, while Korea is a hub in Asia with 15 free trade agreements with 52 countries.
“If both countries reach an agreement in free trade to link America with Asia, it would be ideal in penetrating other countries. We are walking down a road without any travelers between the two countries. This is the moment to change that,” Beeho concluded.
Beeho also tweeted about the agreement on his personal account:
México y Corea, llegó el momento de hablar del TLC: Embajador https://t.co/qI575QoWvo
— 전비호 Chun Beeho (@ChunBeeho) April 1, 2016