The discussion of this commercial mechanism is of the utmost importance since, in Mexico, there are more than 2,000 companies with South Korean investment. In addition, South Korea is among the top five trading partners of our country, while Mexico is the main trading partner in Latin America for South Korea.
Products such as automobiles and their parts, data processing machines, telephone sets, metals, scrap, and food products such as pork, beef, and fish are exported from Mexican territory.
Thus, an eventual FTA between Mexico and South Korea could have benefits for certain industries; for example, agriculture, which could increase the export of products in the face of a reduction in South Korean tariffs.
In contrast, sectors such as the automotive sector (auto parts) do not envision greater benefits from the trade agreement, since the sector is supplied by many companies that are already located in Mexico, while the steel sector has warned of possible difficulties for Mexican steel to compete against subsidized steel exports from South Korea.
The commercial exchange between Mexico and South Korea may not seem high, since it only represents 3.9% of the total trade that Mexico has with its main commercial partner, the United States; however, the agreement could have an important impact on the commercial integration of North America, on the supply chains and on the trade of our country with other nations with which Korean products compete in the Mexican market.
The trade relationship between Mexico and South Korea is a primary issue that should be the subject of in-depth analysis, especially due to the impact that a possible FTA between the two countries would have on Mexico’s supply chains, Mexican investments, productive sectors and the economy in general.
Publisher’s note: José Antonio Romero Tellaeche, General Director of CIDE. The opinions published in this column belong exclusively to the author.
See more information on this and other topics in the Opinion channel