S. Korea moves to deepen economic ties with Mexico, eyes trade deal

South Korea moved to strengthen economic cooperation with Mexico and lay the groundwork for a future trade agreement, using President Lee Jae Myung's state visit to the country as an opportunity.

Mexico is South Korea's top trading partner in Latin America, with bilateral trade valued at around 28 trillion won ($20.6 billion). South Korean investment in Mexico exceeds 18 trillion won, and more than 500 South Korean companies operate there.

According to the Ministry of Trade, Industry and Energy on Sunday, Trade Minister Kim Jung-kwan signed an "Economic and Industrial-Resource Cooperation Initiative" with Mexican Economy Minister Marcelo Ebrard on Thursday, immediately after the South Korea-Mexico summit and in the presence of both heads of state.

Both sides agreed that the initiative represents an opportunity to deepen bilateral economic cooperation and pledged to work together to generate mutual benefits.

To implement the initiative, the two countries plan to establish a joint committee to discuss mineral and resource cooperation and improvements to the business environment. Cooperation between the Korea Trade-Investment Promotion Agency (KOTRA) and Mexico's Trade and Investment Unit (UIEG) under the Economy Ministry will also be strengthened to promote trade and investment.

In a separate bilateral meeting with Ebrard, Kim stressed the need for a trade agreement between the two countries.

Kim said Mexico's recent tariff increases on countries without free trade agreements had hurt South Korean companies and reduced incentives for further entry and investment.

He added that South Korea is a reliable supply chain partner for Mexico's strategic industries and said a trade agreement would elevate bilateral economic cooperation to a new level, advancing collaboration in future industries and supply chains.

The two sides agreed to launch a "joint benefit study" to analyze the potential gains and ripple effects of a trade agreement, and said they would continue discussing specific cooperation measures through a newly established joint committee and working groups.

Kim also conveyed the difficulties South Korean companies face in Mexico — including customs delays, port congestion, inadequate power infrastructure and the Mexico-Brazil automotive agreement — and urged the Mexican side to provide active support.

The Ministry of Trade, Industry and Energy and the Korea Chamber of Commerce and Industry co-hosted the Korea-Mexico Business Forum on Friday at the World Trade Center in Mexico City, with President Lee, Minister Ebrard and about 300 business leaders from both countries in attendance.

Companies and institutions from both sides signed four MOUs to build a foundation for cooperation. POSCO International, Korea Aerospace Industries (KAI) and the Mexican Federation of Aerospace Industries (FEMIA) signed a comprehensive cooperation MOU for aerospace industry development, while HS Hyosung Advanced Materials and the government of the Mexican state of San Luis Potosí signed an MOU on investing in an industrial products manufacturing base.

The Korea Chamber of Commerce and Industry and KOTRA each signed separate agreements with Mexico's Foreign Trade Commission, pledging to expand cooperation in economic and trade affairs and in trade and investment, respectively.

KOTRA also held a Korean Excellent Products Exhibition in Mexico City on Thursday and Friday to help South Korean consumer goods companies enter the Latin American market. A total of 59 domestic companies — 82 including online participants — and 123 buyers held 730 consultations.

"We will actively support both countries in expanding the horizon of cooperation into promising future sectors — advanced industries, energy and strategic industries, digital and biotech — so that the business forum and MOU signings become an opportunity for our two economies to grow together," Kim said.