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Honduras would greatly benefit from FTA with South Korea

After two rounds of formal negotiations between the authorities of South Korea and Central America, it seems that the free trade agreement (FTA) between the two blocs is feasible and will be profitable for every one involved.

Central America is interested in exporting refined sugar, coffee, bananas, beef products, tropical fruits, other agricultural products, and minerals to South Korea.

Meanwhile, South Korea wants to facilitate the export of vehicles, auto parts, high-tech electronics products, iron, and steel to Central America.

"Honduras would benefit greatly if it took advantage of South Korea's technological advantages and huge progress, not only in textiles, but also in telecommunications and other areas where there has been an increase in investments," said Efrain Corea, vice president of the Honduran College of Economists (CHE).

The third round will be held next February in the United States. Expectations are the FTA will be signed in December 2016.

The trade balance in 2014 was negative for Central America, as it exported US $342 million to South Korea but imported $1.396 million dollars from the Asian country.


Maynor Velasquez, director of the National Association of Banana Producers (Aprobana) said that the independent producers foresaw good business opportunities to expand the number of countries to which they export their fruit.

"If there were better opportunities for export, we would be very willing to see new markets beyond Central America and the United States. Maybe the distance is an impediment but, if its feasible to ship the products considering the banana's green life and good incentives, we would possibly consider new markets," he said.

Most of the tropical fruits produced in Honduras are consumed in the region and the country exports a very small volume to far away markets, such as the European Union, as in the case of melons and watermelons.


In the second round of negotiations, held last week in San Salvador, El Salvador, negotiators spoke about market access, rules of origin, technical barriers to trade, sanitary and phytosanitary measures, trade defence, institutional issues, solution to controversies, customs procedures, and trade facilitation.

South Korea is the fourth biggest Asian economy and it is a central country, as it connects China and Japan. Moreover, it is also the first country to have signed FTAs with the major economic blocs in the world.


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