The South Korea-Colombia free trade agreement (FTA) went into effect on Friday, allowing Korean companies to have greater access to the third largest market in Latin America. Korean car makers and auto parts makers are expected to benefit the most from the new trade pact with Columbia while imported coffee prices would drop dramatically in Korea due to the treaty.

Under the Korea-Columbia trade agreement, Columbia will immediately eliminate tariffs on 4,390 South Korean export products to the South American country, and lower the tariffs on 2,797 products within 10 years, Korea’s trade ministry said on Thursday.

Columbia is a small trading partner to Korea with trade volume between the two countries reaching $1.45 billion last year, a mere 0.1 percent of Korea’s total trading volume, but Colombia, with the third-largest population in South America at 46.2 million people, is regarded as one of the fast-expanding consumer markets in the region. It is also rich in resources like oil and natural gas.

The new FTA that requires the two countries to do away with most tariffs within 10 years is expected to help Korean companies have greater access to not only Columbia but also other countries in Latin America. According to Korea Customs Service, Korea will eliminate tariffs for 99.9 percent of products imported from the South American country, and Colombia on 97.8 percent of products shipped from South Korea.

Korea International Trade Association said in its report on the Korea-Columbia FTA that Korean automotive makers and part suppliers would benefit the most from the trade agreement, as the 35 percent tariffs on cars, Korea’s promising export items, will be eliminated within 10 years, with car parts (5-15 percent tariffs) and car tires (15 percent) within five years. The 15 percent tariffs on Korean cosmetics and beauty products will be lifted within seven to 10 years, while the 5 to 10-percent tariffs on medical equipment and non-alcoholic beverages will be eliminated immediately.

South Korea will also immediately remove 54 percent tariffs on coffee from Columbia, which is expected to help lower the overall price of coffee in Korea. South Korea is also able to enter Columbia’s procurement market worth $42.6 billion thanks to the recent trade treaty.

Korea has so far clinched free trade agreements with 51 nations including the United States, the EU and China, according to the Trade, industry and Energy Ministry.

By Ko Jae-man, Park Yong-bum and Lee Sang-duk

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