S. Korea, Ecuador strike free trade agreement

South Korea struck a free trade agreement with Ecuador on Wednesday, which is expected to boost bilateral trade and investment and help South Korea diversify its trade portfolio, the industry ministry said.

South Korea’s Industry Minister Bang Moon-kyu and Ecuador’s trade minister, Daniel Legarda, signed the joint statement on the conclusion of negotiations for the Strategic Economic Cooperation Agreement (SECA), a type of free trade deal, in Seoul, according to the Ministry of Trade, Industry and Energy.

The two sides launched negotiations for a free trade agreement (FTA) in 2016 and have held nine official rounds of talks. It is South Korea’s 23rd FTA.

The two countries plan to officially sign the deal in the first half of next year following due domestic procedures, the ministry said.

Under the deal, South Korea will remove tariffs on 96.4 percent of all items and Ecuador will lift tariffs on 92.8 percent of all products traded.

South Korea, in particular, expects growth in exports of vehicles, food items and various cultural contents to Ecuador through the agreement, and the two sides also agreed upon stronger cooperation on cross-border trade in services and intellectual property rights.

“Ecuador is rich in natural resources, such as copper, zinc and silver, and it can be a major partner for South Korea in terms of stable supply chains of critical raw materials,” the ministry said in a release.

“We also expect Ecuador to be a crucial foothold for our advance into the broader South American market,” it added.

Ecuador is South Korea’s seventh-largest export destination among Central and South American nations, with bilateral trade volume coming to about US$980 million last year, according to government data.

Ecuador adopted the U.S. dollar as its official currency and has implemented various market-friendly policies.

Following the signing ceremony, a business forum was held, where officials of around 100 companies from the two nations discussed ways to boost cooperation and explored business opportunities, the ministry said.