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| Home > Korea & Latin America > Korea
& Latin America Relations |
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Korea has established diplomatic relationships with
32 Latin American & Caribbean countries except Cuba. Among these
countries, Korea runs and operates 15 embassies. It has also established
a consulate general in Sao Paulo, Brazil.
As the relationship between Korea-Latin American & Caribbean countries
progresses, their interest in Korea has increased and currently there
is a Resident Mission(RM) in Seoul from 16 Latin America-Caribbean
countries. |
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| cf) North Korea has established diplomatic relationship with
20 countries in the region and is operating Resident missions
in Mexico, Cuba, Peru and Guyana. |
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n order to meet the increasing demands arising from
rapid expansion of bilateral exchanges and cooperation, Korea runs
various bilateral/multilateral consultative meetings with Latin American
& Caribbean countries. Specifically, Korea has had policy consultation
meetings on a semi-regular basis with countries such as Mexico, Chile,
Brazil, Argentina, Venezuela, Peru, Paraguay, Ecuador, Bolivia, Jamaica,
Uruguay. Korea is also holding joint committees with major countries
such as Mexico, Chile, Brazil, Argentina and Venezuela.
In addition, to promote multilateral cooperation, Korea has been participating
in OAS (since 1981) and ACS (since 1998) as a permanent observer,
and also regularly held consultative meetings with Rio Group
(since 1996), SICA (since 1997) and MERCOSUR (since
97).
In order to deepen friendly relationship and boost further cooperation,
there has been substantial exchanges of visits by the head of states
between Korea and Latin America. Since 1970, 25 Latin American presidents
visited Korea. Most recent visits include visits by the presidents
of Brazil(’01.1), Costa Rica(’01.4), Mexico(’01.6), Ecuador(’02.5)
and Chile(’03.2). From the Korean side, president Roh Tae-woo visited
Mexico in 1991 and Kim Young-sam visited Guatemala, Chile, Argentine,
Brazil and Peru in 1996. |
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Trade with Latin America & Caribbean countries has
incremented rapidly since the late 1980’s and reached $100 billion
for the first time in 1995. The Korea’s export growth rate for the
past 15 years with Latin America & the Caribbean has exceeded
that of other continents. This reinforces the potential economic development
with Latin America & Caribbean countries.
Korea ranks 6th behind U.S. Japan, Germany, France, China respectively
in terms of trade volume. For the past 2-3 years, it has exported
$90 billlion (5-6% of entire nation export) worth of goods to Latin
America while importing $35billion worth (2%of entire nation import).
Korea’s export accounts for 2-3% of the whole import of the Latin
America & the Caribbean. As trade balance between the two region
is in favor of Korea by $50-60billions annually, Korea is considering
running various programs to cope with trade balance instability in
order not to hinder sound relations between the two regions.
As of 2002, Korea’s major exporting countries are Panama, Mexico and
Brazil while the major importing countries are Brazil, Chile and Mexico.
Korea exports mainly vessels, fabrics, synthetic resins, auto mobiles,
cellular phones, home appliances and other electronic goods to Latin
America, and imports predominately raw materials and commodities such
as bronze block, crude oil and iron ore. |
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< Korean Exports to Latin America > |
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(unit: million dollars, %) |
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| Country |
2002 |
2003(Jan-May) |
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Amount |
GrowthRate |
Amount |
GrowthRate |
| Panama |
1,184 |
-31.1 |
651 |
14.3 |
| Mexico |
2,231 |
3.8 |
931 |
-4 |
| Brazil |
1,247 |
-22.6 |
497 |
-8.2 |
| Guatemala |
501 |
6.5 |
213 |
17.5 |
| Chile |
454 |
-20.9 |
216 |
19.4 |
| Peru |
196 |
4.3 |
98 |
29.1 |
| Colombia |
272 |
20.4 |
118 |
-4.9 |
| Costa Rica |
111 |
-0.2 |
35 |
-20.7 |
| Argentina |
51 |
-83 |
48 |
252.7 |
| Domi.Rep |
185 |
41.4 |
46 |
4 |
| Venezuela |
247 |
-55.4 |
31 |
-78.5 |
| Honduras |
138 |
49.4 |
60 |
12.9 |
| El Salvador |
73 |
-16.1 |
32 |
8.9 |
| Ecuador |
167 |
-0.1 |
68 |
10.1 |
| Nicaraguay |
85 |
43.9 |
29 |
1.2 |
| Uruguay |
35 |
-55.7 |
19 |
5.8 |
| Paraguay |
21 |
-32.9 |
7.8 |
-10.7 |
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Source: KOTIS |
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Korea’s direct investment toward the Latin American
and Caribbean region has been somewhat mediocre compared to Korea’s
FDI toward developed regions such as North America, Europe and other
newly emerging markets such as China and Southeast Asia. Nevertheless,
one positive signal is that it has shown stable growth over the past
10 years.
As of September,2003, Korea’s gross FDI in Latin America amounted
to $34.3 billion which accounts for 7.9% of the nation’s total out-bound
FDI. The main invested countries are Mexico($2.8bil), Brazil($2.7bil),
the virgin islands($1.6bil) and Argentina($1.4bil) with main focus
being placed on such industries as manufacturing, mining, merchandising,
and IT sectors.
In recent years, investment tendencies have shifted from raw material
development and small-scale investments to more highly value added
industries such as electronics, IT goods and motor cars in an attempt
to meet the demands from both export and local markets of Latin America. |
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< Foreign Direct Investment by region > |
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(unit: thousand dollars) |
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| Region |
Amount |
Total investment(%) |
| Asia |
17,582,425 |
40.7 |
| Middle East |
803,883 |
1.9 |
| North America |
12,440,981 |
28.8 |
| Latin America |
3,430,955 |
7.9 |
| Europe |
7,274,999 |
16.8 |
| Africa |
738,875 |
1.7 |
| Oceania |
965,430 |
2.2 |
| Total |
43,237,548 |
100 |
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Source:The exports-imports Bank of Korea |
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Korea’s trade balance with the region has been in the
black for several decades and this trend is not considered to be desirable
for long-term relations between the two regions. Since products from
Latin American and Caribbean countries, except a few raw materials,
are hardly considered to be competitive in the Korean market, trade
imbalance is forecast to last for the time being. In order to cure
this imbalance in trade, Korea is currently undertaking various economic
cooperation projects that may be consolidating bilateral ties with
Latin American countries.
Since 1963, Korea’s ODA(Official Development Assistance)is under operation
to provide a grant type aid under the direction of Korean International
Cooperation Agency (KOICA) and the Economic Development Cooperation
Fund (EDCF) supported by the Exim bank of Korea.
Between 1991 to 2002, KOICA’s bilateral grant aid toward the Latin
American and Caribbean region recorded in total $50 million which
comprises approximately 9.7% of the entire cooperation fund. As of
Sep. 2003, the total EDCF pledged for the region amounts to approximately
\2035 billion which accounts for 11.4% of the total fund ever pledged.
The focus of bilateral grant aid to Latin America and the Caribbean
has been set on human resource development (HRD) and transfer of economic
development related experiences and knowledge. In the case of EDCF,
the emphasis has been placed on providing credit assistance in building
various SOCs(Social Overhead Capital) especially in the fields of
transportation, communication network, power distribution, sanitation
and so forth. |
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< Korea’s Grant Aid toward Latin America
by year > |
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(unit: million dollars) |
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| Year |
Total |
‘91 |
‘92 |
‘93 |
‘94 |
‘95 |
‘96 |
‘97 |
‘98 |
‘99 |
2000 |
2001 |
2002 |
| Total |
514.0 |
22.8 |
29.4 |
30.4 |
38.3 |
49.2 |
53.7 |
55.7 |
38.4 |
37.9 |
45.4 |
54.0 |
58.8 |
| L.A |
50.3 |
3.5 |
3.0 |
3.6 |
3.6 |
3.6 |
4.2 |
7.8 |
4.7 |
2.5 |
3.8 |
3.1 |
6.9 |
| (%) |
9.7 |
15.4 |
10.2 |
11.8 |
9.3 |
7.4 |
7.9 |
14.1 |
12.2 |
6.7 |
8.4 |
5.7 |
11.7 |
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< 2003,Korea’s Grant Aid toward Latin America
by category > |
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(Amount unit: thousand dollars) |
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| Project |
Total |
HRD |
Provision
Of
Equipment |
Project |
Others
(NGO) |
| total |
Resear-
ches |
Profe-
ssionals |
Volun-
teers |
| Amount |
5,558 |
2,288 |
910 |
307 |
1,071 |
695 |
2,533 |
42 |
| Personnel(case) |
306(24) |
315 |
261 |
10 |
44 |
14 |
9 |
1 |
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