Trade, Industry and Energy Minister Bang Moon Kyu (right) and Ecuadorean Minister of Production, Foreign Trade, Investments and Fisheries Daniel Legarda on Oct. 11 take a photo holding each side's copy of a bilateral strategic economic cooperation agreement at the signing ceremony held at Lotte Hotel in Seoul's Sogong-dong neighborhood. (Ministry of Trade, Industry and Energy)

By Choi Jin-woo

Korea and Ecuador have signed a strategic economic cooperation agreement (SECA), a de facto free trade agreement (FTA).

Minister of Trade, Industry and Energy Minister Bang Moon Kyu and Ecuadorean Minister of Production, Foreign Trade, Investments and Fisheries Daniel Legarda on Oct. 11 signed a joint statement announcing the conclusion of SECA negotiations at Lotte Hotel in Seoul.

This deal is Korea's 23rd FTA. Yonhap News in Seoul said SECA's content is identical to that of an FTA but the accord's name emphasizes "comprehensive economic cooperation" in reflecting Ecuador's intent.

In July last year, the two sides resumed talks on the deal after a hiatus of around six years and narrowed their differences through four official rounds of negotiations. In the end, Minister Legarda's visit to Korea made it possible to declare conclusion of the agreement.

The Korean ministry said Ecuador has the third-largest crude oil reserves in Central and South America and abundant minerals such as copper, zinc and silver, giving the country high strategic value as a partner to stabilize supply chains for core raw materials. Thus SECA has also set basic regulations for cooperation if a supply chain crisis erupts.

Under the deal, Korea's tariff-free rate on Ecuadorean imports is 96.4% and Ecuador's on Korean imports is 92.8%. Fifteen years after SECA takes effect, Ecuador will lift tariffs on Korean cars, which are as high as 40%, to improve market competition conditions for Korean automakers. 

Leading Korean exports with high prospects in Central and South America like heavy construction equipment and Korean food including pears, gim (laver) and ramyeon (instant noodles), for which demand is rising in the region, will have tariffs abolished or cut, thus higher market accessibility and expanded exports are expected.

Moreover, regulations in Ecuador on sectors like public projects, online markets and technical barriers to trade will be greatly eased such as reforming residence requirements and allowing data transfers, alleviating bottlenecks Korean companies can experience. Also reflected are regulations to protect intellectual property rights like popular trademarks and solutions in the event of infringement of such rights.

The ministry said, "Based on the negotiations, we have opened the audiovisual service sector such as online games, distribution, construction, and movies and music, and this will not only raise consumption of the regionally popular K-Content but also prompt its spread to nearby areas in Central and South America."

Both sides decided to officially sign SECA in the first half of next year and effectuate it as soon as possible after the two countries complete their respective domestic procedures.

paramt@korea.kr