Free Trade Everywhere
The Korea-Colombia FTA is expected to take effect within this year. According to the Korea International Trade Association, the Parliament of Colombia is currently going through the ratification process for the agreement prior to the final step of constitutional court approval.
If the agreement becomes effective as scheduled, Korea will be the first Asian country in free trade relations with Colombia. The industrial segments including automobiles, tires, and synthetic resin are expected to benefit directly from the agreement. The 35 percent tariffs on cars and trucks, which account for 28 percent of Korea’s exports to the Latin American country, are to be eliminated in steps, along with those on synthetic resins and tires, amounting to 10 percent or so.
Korea’s automobile exports to Colombia have gradually declined since the implementation of the U.S.-Colombia and E.U.-Colombia FTAs. Korean automakers’ share in the Colombian car market fell from 17.8 percent to 13 percent between 2011 and last year whereas that of U.S. carmakers increased from 3.7 percent to 9 percent during the same period. German automakers raised their shares from 4.7 percent to 5.2 percent as well, between 2013 and last year. The Germany-Colombia FTA took effect in August 2013.
In the meantime, the bilateral trade volume between Korea and Colombia exceeded US$2 billion in 2014. At present, Korea takes up 2.3 percent of the import market of the country to rank eighth.