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Korea-LAC Business Forum opens in Seoul

IDB President Luis Alberto Moreno and Korea’s Vice Minister of Strategy and Finance, Je-Yoon Shin, open two-day meeting

SEOUL, Korea – Rapidly expanding trade between Korea and the nations of Latin America and the Caribbean (LAC) could lead to a historic expansion of investment and technical cooperation, said Luis Alberto Moreno, president of the Inter-American Development Bank (IDB). 

In a speech inaugurating the two-day Korea-LAC Business Forum in Seoul, Moreno said that trade between Korea and the 26 countries of Latin America and the Caribbean climbed by 29% to $43.8 billion in 2010, a record. As trade and investment increases, it has become clear that there is “a rich pool of opportunities that Korea and Latin America have to learn from one another,” he added. 

Over the past two decades, Korea-LAC bilateral trade has expanded rapidly, growing at an annual average rate of 16.1%, twice as fast as Latin America’s trade expanded with the U.S. and the European Union. Only commerce with China grew at a faster annual rate, 27.5%. Still, trade between Korea and LAC now accounts for just 2.5% of LAC’s total international commerce and 5.1% of Korea’s, meaning there is ample room for growth. 

Moreno urged more than 500 executives and government officials at the meeting to redouble their efforts to eliminate trade obstacles and take advantage of comparative strengths. 

“Korea can provide valuable lessons coming from its success in improving its educational system, and its advances in information technology, transport infrastructure and clean energy technologies,” he said. In return, Latin America “can provide success stories in agriculture, mining, aeronautics and biofuels.” 

In a world marked by a prolonged economic downturn in the United States and serious banking and currency issues troubling the Eurozone, he added, Korea and LAC stand out for their economic resilience and should work together to ensure continued prosperity. 

Korea’s Vice Minister of Strategy and Finance, Je-Yoon Shin, said deeper integration between Korea and LAC is a high priority. 

“Now the world is going through a fundamental shift in economic power. And, at the center of this movement, there are Asia and Latin America,” he said. “The Korean government is making all-out efforts to facilitate cooperation with LAC.” 

Shin noted that following the signing of a free trade agreement between Korea and Chile in 2003, those countries’ bilateral trade has quadrupled, to $7.2 billion. “Now, Chilean wine and grapes [have] become regular features at the Korean dinner table. And made-in-Korea cars are easily seen on the streets of Chile,” he said. 

The event, the fourth such meeting that the IDB has staged in different Asian countries since 2007 in an effort to increase ties between the two regions, attracted more than 500 business executives and government officials, including representatives of trade and investment-promotion agencies from 20 countries in Latin America and the Caribbean. 

The Business Forum was organized by the IDB’s Trade and Integration Sector and its Office of Outreach and Partnerships, along with the Korean Ministry of Strategy and Finance, in close collaboration with the Korean Export-Import Bank, the Korea Trade-Investment Promotion Agency (KOTRA) and the Korean Federation of Industries. 

On the first day of the Forum, attendees heard from leading corporate executives and government officials, who described the most promising sectors for trade and investment between the two regions, which are among the fastest growing in the world today. 

Representatives from leading Latin American oil companies, including Ecopetrol of Colombia, Pluspetrol of Argentina and Brazil’s Petrobras, as well as the Korean National Oil Corporation, discussed opportunities for investment in energy efficiency, while IDB experts in sustainable energy and academics from top Korean universities explored options for renewable energy sources. 

Key officials from LAC’s telecommunications ministries joined with executives of leading Korean IT firms, including Samsung and LS Cable and Systems, to discuss the potential of e-government initiatives and the importance of quickly developing countries’ IT infrastructure, noting that broadband connectivity has been directly linked to the pace of economic growth. 

Panelists also highlighted the importance of developing LAC’s transportation infrastructure and logistics, to reduce shipping times and costs in order to become more competitive. Such investments require financing, and IDB officials described the Bank’s funding mechanisms, as did representatives of Colombia and Brazil’s national development banks and the Korean Export-Import Bank. 

On the second day of the Forum, around 100 companies from LAC and another 100 from Korea will engage in some 500 “matchmaking” sessions set up by the IDB. The matchmaking efforts, aimed at linking companies looking for trade opportunities and investment partners, are a popular feature of the Asian-LAC Business Forums that have been held twice in Korea, once in Japan, and last year in China. 

Also during the first day of the Forum, Korean government officials and IDB President Luis Alberto Moreno signed several cooperation agreements, including one with the Korea Gas Corporation to share expertise on exporting and importing natural gas and another with Korea's Trade-Investment Promotion Agency (KOTRA) to promote trade and improvement of logistics. A third agreement with the Korea Communications Commission will tap Korean expertise to develop better public policies and regulation of telecommunications, as well as to accelerate the penetration of broadband internet access as a tool for social and economic development and for innovation. 

Another feature of the Korea-LAC Business Forum was a training session offered by KOTRA, to 20 representatives of Latin American trade-promotion agencies. The Koreans offered training in best practices gleaned from running Korea’s Special Economic Zones, round-the-clock investor “after care” services aimed at providing them with the support they need once they’ve decided to invest in a country, and special support for small and medium-sized enterprises so that they can take the best advantage of their interactions with foreign investors and trade partners.

Korea-LAC Business Forum 2011