South Korea tightens Central America embrace

Five Central American nations have signed a free trade deal with manufacturing powerhouse South Korea.

The agreement must be ratified by the respective parliaments of each of the signatory nations; Costa Rica, El Salvador, Honduras, Nicaragua and Panama.

Negotiations for the deal had started in June 2015.

In Latin America, South Korea already has free trade deals in place with Chile, Peru and Colombia, according to information on the website of South Korea's trade ministry.

The deal with the Central American nations comes as the US and South Korea clash over the terms of their own agreement, known as Korus.

"The deal in Latin America secures a third route for exports to America amid mounting protectionism from Washington," South Korean media outlet Maeil quoted the country's trade ministry as saying.

The ministry said the deal would particularly benefit South Korea's car and steel export industries.

South Korean trade minister Kim Hyun-chong said that the trade deals will lead to the formation of a "more comprehensive, strategic partnership between Korea and Central America."

Last year South Korean exports to the five nations were US$2.2bn, while corresponding imports were US$333mn, AFP reported, citing South Korean trade agency Kita data.

South Korea has asked to become a non-regional member of the Central American Bank for Economic Integration (Cabei), the latter said in January. The Asian country has proposed to enter with subscribed capital of US$450mn.

Last year Nicaragua said the Export-Import Bank of South Korea (Korea Eximbank) would finance approximately 10 high-impact infrastructure projects in Nicaragua during 2017-21 and open a regional office in the country.

Pictured, from left, El Salvadoran economy minister Tharsis Salomón López Guzmán, Honduran minister of economic development Arnaldo Castillo, South Korean trade minister Kim Hyun-chong​, Costa Rican foreign trade minister Alexander Mora, Nicaraguan minister of development, industry and commerce Orlando Solórzano Delgadillo, and Panamanian vice minister of commerce and industry Diana Salazar (CREDIT: Government of South Korea).