The Colombian Minister of Trade, Industry and Tourism visited Korea last week to gain assistance from Korean agencies to boost the competitiveness of Colombian industries before a free trade agreement comes into effect, likely this year.

Minister Cecilia Alvarez-Correa signed an offset agreement with Korea’s Ministry of Trade, Industry and Energy, Korea International Cooperation Agency and Korea Trade-Investment Promotion Agency, which would provide technical assistance to Colombia’s automotive and electricity sectors.

An offset agreement is an ancillary deal between a government and agency or company to enhance collaboration under a negotiated contract. Companies usually provide assistance to boost their chance in government contracts, particularly in developing countries. 

Korean agencies agreed to share knowledge in technological innovation, research and development, and human resource management, Alvarez said.

“As Colombia’s first FTA with an Asian economy, the agreement will open the door to the Asia-Pacific region for our people and business,” Alvarez told The Korea Herald on April 1. “Colombia wants to learn from Korea’s rapid development experience and capitalize on our complementary trade structure.”

The FTA with Korea was approved by the Colombian Congress in December and is currently undergoing a Constitutional Review.

Colombia recorded one of the highest economic growth rates in Latin America, with an average 4 percent growth rate for the last 10 years. The volume of foreign direct investment rose from $6.8 billion in 2010 to $15.5 billion in 2014.

Meanwhile, Korea is the 29th-largest FDI contributor to Colombia and the second-largest investor country from Asia. Bilateral trade volume increased from $730 million in 2005 to $2 billion in 2014.

Colombia has accumulated a $7.7 billion trade deficit with Korea for the last 10 years, which the country aims to reduce through free trade. It wants investment in the automobile, transportation and energy sectors, and plans to increase the exports of coffee, meat, fruit and flowers, as well as cosmetics, garments and coal to Korea, the minister said.

Korea’s Ministry of Trade, Industry and Energy and Korea International Cooperation Agency are working with several Colombian industries to increase productivity and competitiveness, ProColombia said.

Alvarez, one of seven female ministers in the Colombian President Juan Manuel Santos’ government, highlighted Korean President Park Geun-hye’s planned visit to Colombia in mid-April, which will be accompanied by a trade delegation of 100 companies.

By Joel Lee (joel@heraldcorp.com)