South Korea’s Trade Minister, Yeo Han-koo, recently engaged in a high-level meeting with Mexico’s Ambassador to Seoul, Carlos Penafiel Soto, to address pressing trade concerns for South Korean businesses. A key agenda point was the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA), a trilateral trade pact whose first joint review is scheduled for July. This review is expected to introduce trade uncertainties, prompting significant concerns among Korean companies operating in the region.
Under the existing USMCA framework, Mexico has emerged as a crucial manufacturing hub for numerous South Korean automobile and home appliance companies. These Korean firms extensively leverage Mexico’s strategic location to import intermediate goods, facilitate the production of finished goods, and subsequently export them across the broader North American market. The impending USMCA review, therefore, carries substantial implications for these established supply chains and foreign investment strategies.
During the discussions, Minister Yeo also highlighted concerns regarding Mexico’s recently implemented tariff hikes. He specifically requested the Mexican government’s active support for Korean companies contributing significantly to the Latin American nation’s economy. These higher tariffs, which Mexico began imposing this year, affect imports of vital goods such as automobiles, auto parts, textiles, and steel from countries, including South Korea, that do not have a free trade agreement (FTA) with Mexico.
In a positive stride toward strengthening economic ties, both sides committed to holding high-level talks in the near future. These discussions aim to resume stalled FTA negotiations between South Korea and Mexico, which have been on hold since 2022. The shared objective is to invigorate bilateral trade and investment, fostering greater economic cooperation between the two nations.
