Colombia free trade pact starts July 15

The government announced that its free trade agreement (FTA) with Colombia will take effect on July 15.

Korea will be the South American nation’s first FTA partner from Asia.

The Korean government said that trade volume between the two countries was $1.45 billion as of 2015 and that trade is expected to grow rapidly after the deal becomes effective.

Between 2011 and 2014, the volume was near $1.95 billion, but it has fallen in 2015. “We believe the volume will at least get back to where it was after implementation of the FTA,” said a representative from the Ministry of Trade, Industry and Energy.

Among Korea’s exports to Colombia, automobiles accounted for 29.2 percent and auto parts accounted for 10.5 percent, as of last year.

Colombia, on the other hand, exported crude oil, coffee-related goods and ferroalloys to Korea. Oil and coffee accounted for 29.1 percent and 28.4 percent each of Colombia’s exports to Korea.

The tariff rate for automobiles is currently 35 percent and the two countries agreed to eliminate it in 10 years. Tariffs for auto parts are 5 to 15 percent and will be removed in five years, according to the Trade Ministry.

The tariff rate for coffee, which was at 8 percent, will be removed.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]