Chile and South Korea have begun negotiations to expand their free trade agreement (FTA) with the aim of further strengthening their commercial ties and promoting bilateral trade. This initiative arises in a global context of growing interest in international trade and economic cooperation between countries.
Both nations have recognized the potential of expanding their existing FTA to address new areas of collaboration and facilitate access to each other’s markets. These negotiations are expected not only to benefit Chilean and South Korean exporters by reducing trade barriers, but also to boost investment and promote technology transfer between the two countries.
The expansion of the Chile-South Korea FTA reflects both nations’ commitment to free trade and economic openness, as well as their determination to strengthen trade ties in an increasingly interconnected global environment. These negotiations are expected to result in an agreement that promotes economic growth and sustainable development in both nations.
Chile and Korea have had a Free Trade Agreement (FTA) in force since 2004. This FTA is the first agreement of this nature signed between an Asian country and a Latin American country and it is expected that an agreement to modernize the pact will be sealed in the coming months. The ninth round of negotiations will take place in April. The agricultural sector welcomes the possibility of an agreement and believes that fresh fruits and wines would be the most benefited Chilean shipments.
According to the Undersecretariat of International Economic Relations (Subrei), during this process the modernization of the chapters on market access and intellectual property is being negotiated. In addition, the incorporation of new chapters is being negotiated, such as digital economy, gender, labor, environment, anti-corruption, trade facilitation and cooperation, with annexes on global value chains, cultural cooperation and SMEs.
Since the entry into force of the pact, trade has grown from US$ 1.8 billion to US$ 7.508 billion in 2023, with an average growth rate of 5.6%. Trade exchange has been characterized by a positive trade balance, which in 2023 reached US$ 4,683 million, adds the Subrei.
South Korea is currently Chile’s fifth largest trading partner and the third largest in the Asian region, after China and Japan. During 2023, trade exchange reached US$ 7,508 million, with an average annual growth of 4.1% in the last six years. Exports were US$ 6,020 million, a 7% average annual rise between 2018 and 2023. The balance of trade balance was a surplus of US$ 4,683 million at the end of last year.
In 2023, the main exports to South Korea consisted of refined copper cathodes and cathode sections for US$ 1,247 million; copper ores and their concentrates for US$ 1,132 million; lithium hydroxide for US$ 853 million; and lithium carbonates for US$ 839 million, among others. The main imports from South Korea were passenger cars for US$ 220 million; vans for transporting goods for US$ 83 million; and distilled fuel oils for US$ 79 million.
However, the agricultural industry believes that the extension of the pact will also be beneficial for its products. “Chile exports a lot of grapes, cherries, kiwifruit, avocados and citrus fruits to South Korea. Anything that expands the market portfolio and provides better trading conditions with countries with per capita income as high as South Korea helps a lot. Among the products that will benefit most from the modernization of the pact are fresh fruit and wines.
