FTA El Salvador - South Korea Applies from January 2020

The Free Trade Agreement between the Asian nation and El Salvador will enter into force on January 1 of next year, and the value traded between the two economies is expected to increase in the future.

Friday, November 22, 2019

After two years of negotiation, the treaty in question was signed in February 2018 by El Salvador. However, in September 2019, El Salvador's Ministry of Economy confirmed that the exchange of diplomatic notes from the trade agreement between the two nations, in which it was to be determined when it would enter into force, was still pending.

After weeks of waiting, Francisco Escobar Thompson, honorary consul of South Korea in El Salvador, assured that the Free Trade Agreement (FTA) with the Central American country will enter into force on January 1, 2020.

Thompson explained to Elmundo.sv that "... The FTA is a very broad treaty, very beneficial for El Salvador and begins on January 1 of next year to enter into force. It is a non-restrictive treaty, which talks about cooperation and monitoring of the issues. We would increase by 20% in amounts, as soon as we begin to work with the FTA and little by little these figures will double and develop the country in the best way."

Johanna Hill, managing partner, Catare Consulting Group, said that "... in recent years exports and imports between El Salvador and Korea have doubled; however, the amounts remain low. Seeing these figures in exports is a positive sign that we are being taken into account in the Korean market, however, the amounts remain low."

Salvadoran exports to the Asian country report considerable increases, because according to figures from the Central Reserve Bank, in 2018 sales from El Salvador to South Korea reached $12.4 million, and for the first ten months of 2019 the amount increased to $29.9 million.

Regarding the situation with the other countries of the region, in August 2019 the National Assembly of South Korea confirmed the ratification of the FTA and announced the beginning of the diplomatic process, which consists of obtaining the endorsement of the chancelleries of each of the Central American countries involved, with the exception of Guatemala, which negotiated the agreement separately.

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