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South Korea Free Trade

Wednesday, November 23, 2016

Central American exporters of coffee and processed food could benefit, as South Korea lifts customs duties on most imported products, as part of a free trade agreement concluded this month with five countries in the region.

Currently, imported ground or whole bean coffee pays duties of 8%, while jams, jellies and marmalades pay up to 30%.

Several types of fruit and vegetable concentrates, as well as processed vegetables, will also see a significant drop in Import barriers.

Korea also imposes duties on the importation of various types of fresh produce.

However, Central America generally does not have crop yields big enough to supply major new markets, while the cost of refrigerated trans-Pacific transport is another factor, which limits the export of low value-added products.

As far as imports from South Korea are concerned, the agreement could improve access for Korean medications, specialty foods and beverages, and plastic and metal products.

The deal will not affect either high-technology products, mainly LG and Samsung cell phones, or automobiles, mainly Hyundai motor vehicles, which generally enter the region free of import duties.

The agreement has yet to be ratified by the parties, consisting of South Korea, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.