Recent Mexican and South Korean commercial agreements will hopefully pave the way to a full free trade agreement in the near future.
Mexican and South Korean trade relations intensify.
This past Monday, February 16, 2015, two Mexican and Korean commercial agreements entered into effect.
The “Acuerdo de Reconocimiento Mutuo,” or the Mutual Recognition Agreement; and the “Operador Economico Autorizado,” or the Authorized Economic Operator (AEO) program are Mexican and South Korean commercial agreements that were signed signed by both parties on March 11, 2014.
As a result of the signing of the two accords, Each nation has agreed to recognize the supply chain security programs of that have been implemented by the other. As a part of the Mexican and South Korean commercial agreements, Mexico now recognizes South Korean companies that have been certified under the nation’s AEO program. In addition to South Korea, there are currently fifty-seven companies worldwide that have similar AEO programs in place. Countries that have implemented Authorized Economic Operator programs to ensure the integrity of their supply chains have done so by working within the SAFE Framework of Standards that has been developed by the World Customs Organization. The main features of the SAFE Standards include:
- the imposition of consistent procedures to mitigate supply chain risk and potential threats to security;
- a description of benefits that will accrue to companies that meet security standards in their supply chains;
- the standardization of advance electronic cargo data;
- the assurance that customs personnel will inspect potentially risky outbound shipments when asked to do so by the customs authority of the receiving nation.
As a result of the Mexican and South Korean commercial agreements that have been in effect since the beginning of the present week, South Korea now officially recognizes Mexico’s “Nuevo Esquema de Empresas Certificadas (NEEC), or its New System of Certified Companies program for supply chain safety and security. Mexico’s NEEC program was instituted in 2011, and is, essentially, Mexico’sequivalent of C-TPAT in the United States. Since the inception of the program, approximately two hundred shippers have achieved certification. The main benefits that are enjoyed by participating companies include:
- Streamlined Mexican customs compliance checks and processing;
- Enhanced trust by Mexican customs authorities;
- Fewer inspections, and priority processing, for those remaining inspections for shipments originating in Mexico;
- Improved inventory cycle time;
- Favored compliance status for special trade partnership programs.
The two Mexican and South Korean commercial agreements will serve as part of efforts to increase the flow of goods that transpires between the two trading partners. In 2014, Mexico was the world’s tenth largest importer of goods from the Asian nation. This represented a total of just under US $11 billion dollars worth of merchandise. During the same year, Mexico exprted goods valued at US $3.2 billion to the southern portion of the Korean peninsula. Trade officials in both countries see the steps that have been recently taken as critical to the common desire of striking a comprehensive Mexico-South Korea Free Trade Agreement in the near future.