South Korea and Mexico have agreed to hold working-level talks on a possible free trade agreement. The announcement followed an April 4 meeting in Mexico City between South Korean President Park Geun-hye and Mexican President Enrique Peña Nieto.
Last year Korea’s imports of Mexican pork totaled 10,331 metric tons (mt), a year-over-year increase of 14 percent, although Mexico’s market share dipped slightly (from 2.34 to 2.14 percent). The growth was primarily in chilled pork, with Mexico emerging as Korea’s top supplier (5,536 mt, up 38 percent) and capitalizing on Korea’s demand for single-ribbed belly. Mexico is the only major pork supplier to Korea without a free trade agreement, so Mexican chilled pork still pays Korea’s full 22.5 percent import duty. But Chile is the only supplier to have reached zero-duty status with Korea for chilled pork imports, while the duty on U.S. chilled pork is 11.3 percent and Canadian chilled pork pays 19 percent. So with the weak peso, Mexico’s currency advantage basically offsets its duty rate disadvantage.
Korea imported only 158 mt of Mexican beef in 2015, down 29 percent from the previous year. Beef imports from Mexico have dropped dramatically since 2011, when the volume totaled 5,929 mt. Since that time, Mexico’s beef supplies have tightened and Korea has entered into free trade agreements with the United States, Australia, Canada and New Zealand.
Import data source: Global Trade Atlas