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
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
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.
