Korea and Chile Sign. (Bilateral Trade)

Article excerpt

South Korea reached a free-trade agreement with Chile, its first with any country, a move that will remove barriers to about US$1.3 billion ($2.3 billion) in annual two-way commerce and boost growth.

The accord is Chile's first with an Asian country. It provides for the immediate removal of tariffs on cars, trucks, cell phones, computers and other products accounting for 66 per cent of Korean exports to Chile.

"It sets a base for local companies' greater access to South America," Korea's Foreign Affairs and Trade Ministry said in a statement.

Like other Asian countries, South Korea is turning to bilateral agreements as multilaleral trade talks make slow progress. It is also worried about losing export markets to regional blocs such as the North American Free Trade Agreement, a 1994 accord between the US, Mexico and Canada.

The treaty underscores Chile's efforts to spur economic growth by finding new markets for its exports, which account for a third the country's US$69 billion gross domestic product. …