Korea-Ecuador Reach Strategic Economic Cooperation Agreement... Tariffs on Cars to be Removed Within 15 Years and Home Appliances Within 5 Years

23rd Free Trade Agreement
Conditions Established for Automobile Exports and K-Content Expansion
Ecuador, Rich in Oil and Mineral Resources... Agrees to Cooperate in Major Energy and Mineral Supply Chain Crises

South Korea and Ecuador have concluded a Strategic Economic Cooperation Agreement (SECA). Tariffs imposed on automobile exports to Ecuador will be eliminated within 15 years, enhancing the competitiveness of Korean-made cars.

Bang Moon-kyu, Minister of Trade, Industry and Energy, and Daniel Legarda, Minister of Production, Foreign Trade, Investment and Fisheries of Ecuador, signed a joint declaration announcing the conclusion of SECA negotiations between South Korea and Ecuador on the morning of the 11th at the Lotte Hotel in Seoul. SECA is a type of Free Trade Agreement (FTA) emphasizing comprehensive economic cooperation.

The Korea-Ecuador SECA is the 23rd FTA concluded by South Korea. The two sides resumed SECA negotiations after about six years in July last year. Through four rounds of official negotiations and other discussions, they reduced contentious issues, leading to Minister Legarda's visit to Korea to declare the agreement.

An official from the Ministry of Trade, Industry and Energy stated, "Ecuador is a Latin American country actively pursuing pro-market policies and free trade, using the US dollar as its basic currency, which reduces exchange rate risk and investment risk. It is a new market with great growth potential as a base for investment and expansion into nearby Latin American regions." He added, "The trade volume (exports + imports) between South Korea and Ecuador reached $980 million last year."

Through the Korea-Ecuador SECA negotiations, South Korea agreed to eliminate tariffs on 96.4% of all items, while Ecuador agreed to eliminate tariffs on 92.8%, achieving a high level of market opening.

For Korean automobiles, which currently face high tariffs of up to 40%, tariffs will be eliminated within 15 years after the agreement takes effect, improving local market competitiveness compared to competitors such as China and Japan. Thanks to Ecuador's eco-friendly vehicle support policies, tariffs on rapidly growing small and medium-sized hybrid vehicles (tariff rate 35%) will be eliminated within 5 years. China plans to eliminate automobile tariffs within 20 years through formal signing in May this year.

On the 27th of last month, cars are waiting to be shipped at Pyeongtaek Port as seen from the sky. [Aerial shooting cooperation=Seoul Metropolitan Police Agency Aviation Unit, Pilots: Lieutenant Shin Seung-ho - Lieutenant Park Ji-hwan, Crew: Lieutenant Park Sang-jin] Photo by Kang Jin-hyung aymsdream@

Tariffs on home appliances (20%) will also be eliminated within 5 years. Additionally, tariffs on consumer goods and processed foods gaining attention due to the spread of the Korean Wave in Latin America?such as cosmetics (20% tariff, eliminated in 10 years), ramen (30%, 10 years), gim (seaweed) (5%, 5 years), and health drinks (20%, 7 years)?will be removed, and export foundations for fresh fruits like pears (15%, immediate) will be established. The opening of trade items will also diversify through the elimination of tariffs on construction heavy equipment (5%, 10 years), pharmaceuticals (5%, immediate), and medical devices (5%, 5 years), which have seen increased demand due to Ecuador's development and welfare policies.

Regarding agricultural, fishery, and forestry products of interest to Ecuador, most were opened within the scope of FTAs already concluded with neighboring Latin American countries (such as Korea-Peru, Colombia, and Central America FTAs). For Ecuadorian shrimp, considering domestic industry sensitivity, a limited tariff-free benefit was granted under a tariff-rate quota (TRQ) system to minimize damage. Starting with 10,000 tons, the tariff-free quota will increase over five years, with only 15,000 tons receiving tariff-free benefits after the sixth year. Traditional sensitive items such as rice, chili peppers, garlic, and onions, as well as major seafood like cutlassfish, mackerel, and octopus, will be excluded from tariff concessions for protection.

Ecuador is rich in natural resources such as crude oil (third largest reserves in Latin America), copper, zinc, and silver, making it a country of strategic value for future cooperation to stabilize key raw material supply chains. Accordingly, the Korea-Ecuador SECA includes provisions for establishing a cooperative system and an information exchange and joint response committee in case of supply crises of major energy and mineral resources, as well as building supply chain networks in forestry and healthcare industries to enable mutual cooperation during supply chain crises.

Both sides agreed to formally sign the Korea-Ecuador SECA in the first half of next year and to proceed with necessary domestic procedures to implement the agreement as soon as possible.

Meanwhile, following the signing of the joint declaration on the conclusion of the Korea-Ecuador SECA, a 'Korea-Ecuador Business Forum' was held to promote economic cooperation between the two countries.

This content was produced with the assistance of AI translation services.