Korea, 5 American nations near free trade pact

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Korea, 5 American nations near free trade pact

Korea and five Central American countries moved closer to a free trade agreement, which is expected to pave the way for Asia’s fourth-largest economy to tap deeply into the continent, the trade ministry said Sunday.

In November, Korea and six Central American nations - Nicaragua, El Salvador, Honduras, Costa Rica, Panama and Guatemala - struck a deal, one and a half years after the parties launched official negotiations in June 2015.

But Guatemala has not initialed the deal, as the country delayed its participation in the free trade deal due to unresolved domestic issues, the Ministry of Trade, Industry and Energy said.

Under the deal, they agreed to eliminate tariffs on about 95 percent of goods made from each country within 10 years after the pact takes effect.

The countries will officially sign it in the first half of the year. After signing, the free trade agreement will be submitted to the countries’ respective legislatures for approval before it can be implemented.

The ministry said the Korea-Central America FTA is the first trade accord that the region, which has seven FTAs, including one with the United States, has concluded with an Asian country.

Trade volume between Korea and the six nations totaled $4 billion last year, accounting for about 0.4 percent of the country’s total trade volume.

Korea has a number of free trade deals with major economic blocs, including the U.S. and the European Union, and FTAs with the South American countries of Chile, Peru and Colombia.

Meanwhile, Korea is also seeking to launch trade talks with the South American trade block Mercosur in the first half of this year.

Mercosur, which means the Southern Common Market in Spanish, consists of Argentina, Brazil, Paraguay and Uruguay. YONHAP

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