By THÉRÈSE MARGOLIS
The underlying message at the Mexico-Korea Commercial Forum (Mexco) in Mexico City on Monday, Dec. 6, was loud and clear: Korea wants to reactivate long.-protracted talks to establish a bilateral free-trade agreement with Mexico.
During the conference, which was cosponsored by the South Korean Embassy in Mexico and Mexico’s Council for Foreign Trade, Investment and Technology (COMCE) and held inside the Presidente Intercontinental Hotel in Colonia Polanco, everyone representing Korea (from the country’s ambassador here, Suh Jeong-in to the Asian nation’s trade minister, Yeo Han-koo, who, spoke to the more than 200 virtual and live attendees via satellite), played up the potential advantages of the proposed accord, noting that it could broaden the already-strong binational commercial and economic ties and help both countries to become more competitive in the global marketplace.
“Korea and Mexico are strategic partners that can both benefit from such an agreement, and it would help in the post-pandemic reactivation of both of our economies,” said Ambassador Yeo, pointing out that, with a combined bilateral trade of more than $20 billion annually, Mexico is now South Korea’s largest trade partner in Latin America, and Korea is Mexico’s fourth-largest trade partner worldwide.
Teo also noted that there are currently more than 2,000 Korean companies with capital holdings in Mexico to the tune of nearly $7.4 billion, providing jobs for close to 150,000 Mexican workers.
With a bilateral free-trade agreement, he said, Mexico could export more agricultural products, such as avocados and tequila, to Korea, and could attract even more Korean investment.
But while the Mexican officials who participated in the conference — including keynote speaker Foreign Trade Undersecretary Luz María de la Mora — were gung-ho to beef up Mexican exports to Seoul and bring in fresh Korean capital, they were diplomatically evasive about committing to a free-trade accord.
So why the offish response from Mexico?
Mainly because, at the moment, Mexico’s trade with Korea is still heavily stilted in Seoul’s favor (by nearly $10 billion), and many Mexican companies fear that they would end up getting the short end of the stick in the deal.
A bilateral free-trade pact was first proposed back in 2007, but after strong opposition from Mexican manufacturers, who worried that they would not be able to compete against their Korean counterparts, particularly in the fields of technology and automotive productions, the proposal was tabled.
In other words, longstanding protectionist policies reared their head in Mexico and the voice of economic reason was essentially drowned out.
Notwithstanding, under the current administration of President Andrés Manuel López Obrador (AMLO) — who is no friend to the country’s largest business organizations that had campaigned against the agreement a decade ago — some Mexican politicians are considering taking a second look at the proposed treaty.
Earlier this year, members of the Mexican Senate revisited the idea as a means of diversifying the nation’s international trade ties and consolidating the economic relationship with a country that has maintained friendly diplomatic relations with Mexico for more than six decades.
It won’t be an easy sell for Korea, since the AMLO administration is much more focused on internal affairs that foreign trade relations, and since Mexico’s leery automotive industry — considered to be one of the most vulnerable sectors in the case of such an agreement — is already facing serious economic woes, having registered a monthly drop in export for the last five months.
But at least now Mexico is listening, and with a fresh approach and a desperate need to jumpstart an economy that has registered contractions for the last three years, this might just be the perfect time to reconsider the long-stalled bilateral trade accord.