The Free Trade Agreement (FTA) between El Salvador and South Korea, signed in 2018 and enacted in 2019, has strengthened the business relationship between the two nations significantly. According to data from the diplomatic headquarters of the Asian country, exports from El Salvador to Korea experienced an estimated 161% increase between 2019 and 2022.
In 2021, El Salvador shipped $100 million worth of goods to Korea, a substantial increase from the $20 million sent in 2017 and 2018 combined.
Among the products exported to Korea without tariffs are coffee, sugar, and electronic components such as fixed capacitors. Despite the significant growth in trade during these years, El Salvador is actively seeking new avenues for commerce.
In this regard, a forum and business matchmaking event were held yesterday, bringing together approximately 100 Salvadoran companies and the Korea Trade-Investment Promotion Agency (Kotra) to explore new opportunities within the framework of the FTA.
During his opening remarks at the forum, Korean Ambassador to El Salvador Choo Won Hoon highlighted that despite the pandemic and global economic crises, commercial relations between the two nations have steadily strengthened. He noted, «Last year, El Salvador’s exports to Korea accounted for 0.7% of total exports, while Korean product imports to El Salvador constituted 2.1% of total imports.»
Che Sang Shim, the Director General of Kotra Guatemala, believes that more progress can be made under the agreement since it is designed to gradually eliminate import tariffs. With the FTA in effect, only a few items started directly benefiting from the agreement, while others have been added over the years. It is anticipated that within 10 years, 91% of products will enjoy zero tariffs.
«The FTA offers tariff-free benefits, but it is gradual. We believe it will keep advancing, and at least 6,700 products will be duty-free for imports from South Korea,» he emphasized.
«We see a highly active and enthusiastic economy in El Salvador, eager to increase trade and business. Among all the Central American countries, El Salvador has many opportunities for growth,» he added.
Jorge Hasbún, President of the Chamber of Commerce and Industry of El Salvador (Camarasal), emphasized the importance of such events for local entrepreneurs to explore new markets and diversify their businesses.
«In the last 20 years, exports from El Salvador to Korea have tripled. What we aim for is continuous growth, and for entrepreneurs to become aware of opportunities in other markets. The main products exported are traditional ones such as coffee and sugar, but we are seeking diversification,» he stated.