Korea and Mexico Accelerate Trade Agreement Talks...Expanding Cooperation on Minerals and Supply Chains

Agreement Reached on Joint Benefit Study to Analyze Trade Agreement Effects
Joint Committee and Working Groups Launched
Cooperation to Expand from Minerals and Resources to High-Tech Industries

Kim Jungkwan, Minister of Trade, Industry and Energy (right), is seen taking a commemorative photo on the 25th (local time) in Mexico before a meeting with Lee Jae-myung and Marcelo Ebrard, Mexico's Secretary of Economy. Ministry of Trade, Industry and Energy

South Korea and Mexico are beginning preliminary work toward signing a trade agreement. The two countries have launched a joint study to examine the economic impact of a trade agreement, while also agreeing to broaden the scope of economic cooperation to include minerals and resources, supply chains, and investment. Attention is focused on whether talks between the two countries on a trade agreement will regain momentum, particularly as Mexico has recently raised tariffs on countries without free trade agreements (FTAs), increasing the burden on Korean companies operating locally.

According to the Ministry of Trade, Industry and Energy on September 27, during President Lee Jaemyung’s state visit to Mexico, South Korea and Mexico signed an “Economic and Industrial/Resource Cooperation Initiative” and agreed to launch a Joint Benefit Study to push forward a trade agreement.

On September 24 (local time), Minister Kim Jungkwan of the Ministry of Trade, Industry and Energy and Marcelo Ebrard, Mexico's Secretary of Economy, signed the Economic and Industrial/Resource Cooperation Initiative in the presence of the leaders of both countries, immediately following the Korea-Mexico summit.

The two countries plan to establish a joint committee to implement the initiative, discussing cooperation on minerals and resources and improving the business environment for Korean companies operating in Mexico. To further expand trade and investment, cooperation will be strengthened between KOTRA and corresponding Mexican organizations.

In particular, both nations have agreed to launch a Joint Benefit Study as a preparatory step towards starting negotiations for a trade agreement. This study will analyze the potential economic benefits and ripple effects of such an agreement for both parties. Through the joint committee and working groups, they will continue discussions on specific areas of cooperation.

On September 25 in Mexico City, Minister Kim held a separate meeting with Secretary Ebrard and emphasized the need for a Korea-Mexico trade agreement. He communicated that the recent tariff hike imposed by Mexico on non-FTA countries has increased the burden for Korean enterprises operating locally and weakened the incentives for additional investment.

Minister Kim also conveyed the concerns of Korean businesses active in Mexico. He explained issues such as customs clearance delays, port congestion, insufficient electricity infrastructure, and difficulties related to the Mexico-Brazil Auto Agreement (ACE55), and requested support from the Mexican government.

Economic cooperation at the private sector level is also set to expand alongside the intergovernmental efforts. On September 25, the Ministry of Trade, Industry and Energy and the Korean Chamber of Commerce and Industry held the "Korea-Mexico Business Forum" at the World Trade Center (WTC) in Mexico City, attended by President Lee, Secretary Ebrard, and around 300 business leaders from both countries.

From Korea, more than 150 representatives, including Chey Tae-won, Chairman of the Korean Chamber of Commerce and Industry, Koo Kwangmo, Chairman of LG, Koo Ja-eun, Chairman of LS, Roh Taemoon, President of Samsung Electronics, Song Hosung, President of Kia, and Lee Kyein, President of POSCO International, were in attendance.

The forum introduced case studies of collaborations and business projects between the two countries in sectors such as investment, high-tech industries, supply chains, future industries, energy, and the cultural and creative industries. There were discussions on expanding the focus of cooperation from traditional manufacturing and supply chain sectors to new areas such as energy, digital, bio, and cultural industries.

To translate these discussions into practical business ventures, four private sector memorandums of understanding (MOUs) were signed. POSCO International and Korea Aerospace Industries (KAI) signed a comprehensive cooperation MOU with the Mexican Federation of Aerospace Industries (FEMIA) to advance the aerospace sector. HS Hyosung Advanced Materials signed an investment MOU with the state government of San Luis Potosí for establishing a local production base for industrial products.

The Korean Chamber of Commerce and Industry and the Mexican Business Council for Foreign Trade, Investment, and Technology (COMCE) signed an MOU to expand economic and trade cooperation. KOTRA and COMCE also agreed to strengthen cooperation in the areas of trade and investment.

Minister Kim stated, "South Korea and Mexico have developed a close economic relationship centered on manufacturing and supply chains. The government will actively support efforts to create new opportunities for shared growth by broadening the scope of collaboration into promising future sectors such as advanced industries, energy and strategic industries, digital, and biotech."

Efforts are also underway to open new sales channels to expand into the Central and South American consumer market. The Ministry of Trade, Industry and Energy and KOTRA hosted the "Korea Excellent Products Exhibition" in Mexico City from September 24 to 25 for domestic consumer goods companies.

A total of 82 Korean companies, including those participating online, and 123 local buyers participated in the event, holding 730 business consultations in total. Major local online retail operators, including Amazon Mexico, Mercado Libre (the largest e-commerce platform in Central and South America), and TikTok Shop, also took part.

The government plans to expand bilateral economic cooperation, previously centered on supply chain and investment, into the consumer goods sector, by leveraging Mexico’s position as a base connecting the North and Central/South American markets.

Minister Kim said, "Based on the local demand identified through this event, we plan to expand the scope of cooperation with Mexico, the gateway to the Central and South American markets, from a focus on investment and supply chains to the consumer goods sector as well. The government will fully support our companies' efforts to enter the Central and South American market."

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