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S. Korea, Mercosur Agree to Launch Trade Talks

According to Yonhap News,

(SEOUL=Yonhap News) South Korea and the South American trade block Mercosur agreed to begin formal negotiations for a trade deal in the latter half of this year to facilitate commerce and investment, the Seoul government said Friday.

South Korea signed an agreement to launch the negotiations with four Mercosur member states -- Brazil, Argentina, Paraguay and Uruguay -- during a ceremony held in Seoul. Mercosur expelled Venezuela in 2016 for failing to meet its basic standards.

"This represents a significant step toward deepening the important relationship between the Mercosur Member States and the Republic of Korea," the joint statement said, referring to South Korea's official name. "Strengthening ties through enhanced trade and investment flows is an expression of our shared interest in prosperity and shared commitment to trade liberalization and open markets."

The Korean government expressed hope for expanding its trade network in countries in the fast-growing part of Latin America.

"If the trade deal is struck, South Korea is expected to expand its FTA network beyond North America and Central America," the Ministry of Trade, Industry and Energy said. "It is expected to boost South Korea's exports of auto, auto parts and electronics to Mercosur member states."

South Korea exported $6.6 billion worth of goods to Mercosur states in 2017, up 20.6 percent from a year earlier, mostly electronics parts and autos. The nation imported $4.52 billion from the South American nations, purchasing agricultural products and steel.

Mercosur, which means Southern Common Market in Spanish, has a total population of 290 million people, and its economic size is estimated at US$2.7 trillion, according to the ministry. The subregional economic bloc accounts for 45 percent and 52 percent of the South American continent's population and gross domestic product, respectively.

South Korea has been widely focusing on expanding free trade agreements (FTAs) with many economies since 2003, when it first signed an FTA with Chile.

It now has FTAs with world economic powerhouses, such as the European Union, the United States and China, including the latest FTA with six Central American countries.

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Source: Yonhap News (May 25, 2018)

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