The Peninsula

Renewed South Korea-Mexico Ties

On July 4, the foreign ministers of South Korea and Mexico agreed to expand economic cooperation. Building on the resumption of free trade agreement negotiations earlier this year, the two nations emphasized economic security and supply chains as areas for increased collaboration. In addition to directly responding to global concerns over the COVID-19 pandemic’s ongoing impacts on the supply chain policymakers may view Mexico as a gateway to diversifying Korea’s trade partners in Latin America.

As South Korea’s top Latin American trading partner, Mexico already serves as a production base for Korean firms exploring and expanding market openings in the Americas. Exemplifying this role, steel manufacturer POSCO recently committed to investing USD 136 million by 2030 in the country’s automotive parts manufacturing.

South Korea’s renewed focus on deepening ties with Latin America comes as Mexico and other regional economies express interest in diversification to inoculate their economies from the U.S.-China competition. Coupled with South Korea’s simultaneous shift toward lower reliance on China, Latin America presents opportunities for both parties. Mexico’s membership in CPTPP and USMCA offers a particularly strategic opening for Korea to reinforce trade ties with countries in those trade blocs such as Canada and the United States.

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

Korea View was edited by Yong Kwon with the help of  Jae Chang, Kaitlyn King, Yu Na Choi, and Mai Anna Pressley. Picture of South Korea and Mexico signing an agreement to cooperate in trade and culture on March 17, 1969.