South Koreans will be drinking cheaper coffee and Colombians driving cheaper cars once a free trade agreement (FTA) agreed between the both countries takes effect.
FTA talks began three years ago and included the automotive, agro-industrial, textile and petrochemical sectors, among others.
Go deeper with GlobalData
Next step is signature by both countries and ratification by each government. Colombian government sources have told just-auto the local vehicle assembly industry industry will be protected by a gradual reduction of tariffs, similar to FTAs signed between other countries.
Trade between Colombia and South Korea last year totalled almost US1.5m – $276,146 in Colombian exports and imports from Korea worth $1,233,977.
Colombia is home to three assemblers. GM, based in Bogotá, has capacity of about 100,000 and assembles some GM Korea vehicles like the Spark and Aveo from CKD kits; Renault, based in Medellín, with 80,000 capacity, assembles CKD kits bought from Turkey, France, Spain, Brazil and other sources; and Mazda, also based in Bogotá with room for 15,000 units, builds up the 2, 3 and BT50 pickup trucks.
GM is also building a stamping plant at Bogotá to make and export the 11 body sections of the Aveo Sonic. Renault will export its Duster SUV to the Americas. Mazda is building a factory in Mexico to produce vehicles for NAFTA and that country also has a FTA with Colombia that includes zero tariff on vehicles.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe Colombian vehicle assembly industry represents a tenth of the country’s GDP.
