On Tuesday, South Korea’s Ministry of Trade, Industry, and Energy announced that Guatemala has officially joined the free trade agreement (FTA) between South Korea and a group of Central American countries.
This development occurred three years after the full implementation of the FTA between South Korea and five Central American nations — Costa Rica, El Salvador, Panama, Honduras, and Nicaragua — in March 2021.
With Guatemala, the region’s largest economy, now part of the FTA, the Ministry stated that the South Korea-Central America FTA is effectively complete.
South Korea’s main exports to Guatemala include automobiles, textiles, and petrochemical products. In return, South Korea primarily imports agricultural products like coffee and bananas, as well as minerals such as nickel and carbon, from Guatemala.
The Korea Institute for International Economic Policy forecasts that Guatemala’s inclusion in the FTA will boost South Korea’s gross domestic product by 0.02 percent within five years post-implementation.
The Ministry highlighted that the agreement, which involves the removal of most tariffs either immediately or over time, is expected to significantly enhance the bilateral business climate.
In 2022, the trade volume between South Korea and Guatemala was valued at $454 million, showing a 13 percent decrease from the previous year.
The agreement still requires ratification by the parliament, and the Ministry plans to have it passed and put into effect in the second half of 2024.
