Colombia and Korea Have Developed a Strong Relationship Since 1962

FTA: COLOMBIA-KOREA

Colombia and Korea have developed a strong relationship since 1962 when Colombia sent help to the Korea war, ever since the countries have been committed to promote their relations and in the past years they have had engaged in economic cooperation through trade flows. In February of 2013 they signed a free trade agreement that contributes to the commerce of both countries and brings new opportunities to industries in Colombia and Korea.

Colombia is located in South America, has a population of 46.927 thousands and it’s current GDP is 331.655 million US dollars. Its exports volume is highly concentrated. Their main partner is United States, with 38.5% of the total followed by the European Union with the 15.6%. Other exports partners are Chile, China and Panama. The main exports of Colombia are primary product and natural resources, were petroleum and mining products stand for 65.2%. It can be said that the export products are concentrated in commodities and with no added value. Regarding its imports Colombia’s main partner is the US with 25% of the total followed by China with 15% then the European Union, Mexico and Brazil. Near 80% of Colombians imports are industrialized and manufactured products, specially machinery and equipment. Recently the country has look for new commerce and trade partners to diversify its trade portfolio.

South Korea has develop into one of the most affluent countries in Asia, being the fourth largest economy in the continent and the worlds 15th. The current population is 49,779 millions and has a GDP of 31,714 US$ per capita being a high income developed country. Unlike Colombia, Korea has a more diversified trading portfolio. Main export locations are: China 24%, United States 10%, European Union 10%, Japan 7% and Hong Kong. Korea’s main export products are from the manufacture sector with 85.3% and are characterized to have a medium and high technology machinery and equipment. Their imports are highly diversified, its main partners are: China 16.5%, Japan 13%, European Union 9%, United States 8.5% and Saudi Arabia 7%. Manufactures on natural resources 15%, primary products 35% and technologies 46%, are Korea’s composition on imports.

After knowing about both countries imports and exports we can determine that there is a big range of opportunities to exploit this FTA. To Colombia this bilateral agreement is a great opportunity to increase its exports and also increased foreign direct investment. It is very important to notice that Korea is a highly potential exporter and an innovative leader. Their most significant exports are highly industrialized products with high added value that is what Colombia imports the most. On the other hand, the vast majority of Colombia’s exports belong to primary products (coffee, banana, flowers, oil palm) and natural resources, which are Korea’s biggest imports.