The trade interchange between Latin America and South Korea: The impact of technological development in the trade integration

Trade relations between Latin America and the Republic of Korea started in the early sixties, but only after the beginning of the new century have become more dynamic, especially for the Asian nation. Behind the Korean export boom is the governmental thrust to science and technology, which has resulted in the production of goods with higher added value. The pattern of trade specialization followed by South Korea has allowed it to become one of the leading exporting nations of high technology goods in the world. On the other hand, Latin American nations have also enjoyed a remarkable growth in exports in the last decade, although their exporting profile contrast with that of Korea because their exports tend to be mainly primary products with low added value and some semi-finished goods . The pattern of specialization in Latin America is explained by its provision of vast natural resources, giving it a comparative advantage in world commodity markets. Unfortunately these advantages have not translated into sustained industrial developments throughout the region. In this context, the purpose of this paper is to illustrate the trade trends between South Korea and Latin America in the last ten years in an attempt to understand the reasons behind the asymmetries in trade flows that have been set in this period. The underlying assumption is that the commercial relationship between both parties depends on the pattern of specialization emerged in recent times and responds to the institutional policies implemented by both South Korea and by Latin American nations. The case of Mexico is highlighted because it is getting historic deficits with the Asian nation