Korea - Republics of Central America Free Trade Agreement

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The Korea - Republics of Central America Free Trade Agreement provides for the elimination of trade barriers among its signatory States. The Agreement gradually came into effect, as follows:

  • Oct 01, 2019: in Nicaragua, Honduras
  • Nov 01, 2019: in Costa Rica
  • Jan 1, 2020: in El Salvador
  • Entry into force in Guatemala is pending, following the signature on January 8, 2024.


The Agreement notably provides for the elimination of tariffs for the following energy sector products:

  • Electric generation equipment 
  • Mechanical equipment including pumps, appliances, and other advanced machinery
  • Electric motors, transformers, batteries, and capacitors
  • Motor vehicles
  • Mineral ore and processed products including graphite, manganese, copper, aluminum, and nickel
  • Various products manufactured using above minerals and metals such as sheets, powders, bars, and plates
  • Photovoltaic cells


Under the rules of origin delineated in the Agreement, products may benefit from preferential tariff treatment if:

  • wholly produced or obtained in the country (applicable to minerals, raw materials, and waste and scrap materials)
  • meeting specific requirements, mainly consisting in undergoing sufficient manufacturing processes (eg. processes entailing a change in HS code) or meeting regional value content requirements


The Investment provisions of the Agreement forbid conditions to foreign direct investment, such as export obligations, domestic content obligations, technology transfer obligations, and other non-tariff barriers. The Agreement also contains national treatment and most-favoured nation treatment provisions that require investors from either Party to be treated equally to both domestic investors or those from any other nations.

The Agreement however does not prevent its Parties from taking temporary safeguard measures in the event of serious financial difficulties, threats, or other exceptional circumstances.

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