South Korea is Mexico’s sixth largest trading partner, but the two countries do not have a trade agreement. South Korea would like to change that, says its foreign relations ministry, by reopening trade talks.
The ministry’s Seo Won-sam points out that Mexico already has free-trade agreements with its top five trading partners. Trade talks between the two countries were suspended six years ago because of opposition from the petrochemical, steel and automotive industries, he said in an interview.
Seo argues that Mexican companies with monopolies would be strengthened when faced with doing business in a competitive market, and there are further benefits for consumers in terms of lower prices.
He says Mexico is an attractive market for its geographic location, skilled labor and good infrastructure. “Countries such as Chile, Peru, Colombia and Brazil are enjoying investment that previously went to Mexico. But due to the efforts and achievements of the reforms, Mexico is emerging once again as an attractive nation in which to invest.”
Seo says the two countries have complementary economic structures, a bonus for bilateral cooperation. “Mexico represents an opportunity for the Korean people as much as it does for businesses.”
A group of Korean companies led by Korea Electric Power Corporation is already looking at two power plant projects that have been opened to international bidding. They are two combined-cycle natural gas generation plants whose combined cost will be close to US $2 billion.
Mexico’s ambassador to South Korea says developing this country’s neglected power generation network could mean lucrative contracts for Korean firms. “It will mean many new opportunities for Korean companies particularly in the electricity generation sector. They are well known in the oil and gas sector as well, but I think they enjoy a competitive edge in the electricity sector,” said José Luis Bernal in an interview last week.
“There will be many new opportunities in this sector because of the new reforms. Mexico needs $60 billion in annual investment in the oil sector alone, and Pemex can cover only $25 billion in new investment. New shale gas reserves in northern Mexico could be tapped for further development of Mexico’s natural gas sector.
About 13,000 South Koreans currently make their homes in Mexico.