The fall in prices of commodities and Chinas economic slowdown has revived the need for Latin America to diversify its export base and its trading partners in Asia. South Korea offers a good alternative by virtue of its market potential of more than 50 million people, with a per capita GDP of more than $33,000 (purchasing power parity).
Latin America's potential for exporting to South Korea has so far not been exploited. The largest volume of sales continues to be in mining products and petroleum. It has barely taken advantage of South Korea's trade deficit in agricultural products that makes this Asian country one of the 10 largest food importers in the world.
Several studies have identified the export potential for products like coffee, sugar, fruit, vegetables, meat, fish, seafood and dairy products, as well as non-food products like flowers, tobacco and some basic manufactured items. Nevertheless, South Korea strongly protects its food imports through high tariffs and strict certification and labeling requirements.
Some countries have overcome those obstacles by negotiating free trade agreements (FTAs). However, in Latin America only Chile, Pen! and most recently, Colombia, have signed FTAs with South Korea. Chile's, which was signed in January 2004, enabled it to more than double its exports to the South Korean market over nine years, to $4.2 billion in 2013.
Although the proportion of copper in this total remains high (more than 70 percent), part of the diversity of Chile's offerings are in the agro-industrial sector, including meat products. However, as evidence of the high demands of South Korea's restrictive market, the access protocol for Chilean beef was not approved until 2014, after more than eight years of negotiations. In the world, only...