POST TIME: 23 February, 2018 00:00 00 AM
South Korea signs Central American free trade deal

South Korea signs Central American free trade deal

AFP, SEOUL:  South Korea signed a free trade deal with five Central American countries on Wednesday, even as Seoul and Washington spar over their existing FTA.

Trade Minister Kim Hyun-chong signed the pact with economic ministers from Costa Rica, El Salvador, Honduras, Nicaragua and Panama, said a spokeswoman for the Seoul ministry.

The treaty, which will take effect in each country as it ratifies it, will also provide the world's 11th-largest economy with a "third route" to the US in the face of mounting trade protectionism in Washington, it said.

South Korea and the US have their own free trade agreement, known as KORUS, but have begun talks on renegotiating it at Washington's demand.

US President Donald Trump has repeatedly condemned the pact as a "horrible deal" and a "disaster", and the two allies are at loggerheads over tariffs on steel, washing machines and other goods imposed by Washington in recent weeks.

South Korea's economy is heavily dependent on international trade and the Central American pact will help it export more products such as cars, iron and steel, home appliances and textiles to the region, the trade ministry statement said.

It ran a surplus of nearly $1.9 billion with the the five Central American countries last year, according to figures from South Korean trade body KITA, with exports of $2.2 billion and imports worth $333 million.

The agreement came after 32 months of talks to ease tariffs and lower barriers with six central American countries, although Guatemala decided to stay outside the deal for now.