President Moon Attends Korea-SICA Summit
First Multilateral Summit in Latin America Under Moon Administration... Nearshoring Hub Expected Due to Proximity to the US
[Asia Economy Reporter Lee Ji-eun] The "4th Korea-SICA Summit," held between South Korea and the eight member countries of the Central American Integration System (SICA) for the first time in 11 years, holds significant meaning as the first regional multilateral summit with Latin America under the Moon Jae-in administration. In the post-COVID-19 era, it is expected to serve as an opportunity to secure a foothold in Latin America, which is rapidly emerging as a nearshoring production base adjacent to the United States.
On the morning of the 25th, the Blue House announced that President Moon held the 4th Korea-SICA Summit via video conference with the eight SICA member countries and the SICA Secretary-General. During the meeting, President Moon expressed hope that Korea would become a partner in green and digital cooperation with SICA member countries for economic recovery after COVID-19 and emphasized developing a future-oriented comprehensive cooperative relationship.
SICA, often referred to as the Central American equivalent of the EU, consists of eight countries: Costa Rica (the chair country), Guatemala, Nicaragua, Honduras, El Salvador, Panama, the Dominican Republic, and Belize. South Korea is approaching the 60th anniversary of diplomatic relations with these countries next year.
SICA occupies a geographically and economically strategic position connecting North America, South America, the Pacific, and the Atlantic. It has gained attention as an import route for major raw materials such as U.S.-origin oil, following the U.S. shale revolution and the opening of the expanded Panama Canal. Over 20 Korean large corporations, including Samsung and LG, have established local offices in Panama, and more than 170 Korean companies have entered Guatemala, indicating active Korean business presence.
Especially after COVID-19, the region is highly regarded for its potential as a nearshoring export forward base adjacent to the United States. A Blue House official stated, "For Korean companies currently producing and exporting in China and Southeast Asia, this can serve as an alternative production base amid the recent U.S.-China conflict." Major countries such as the United States and Spain are also strengthening cooperation with SICA. SICA, which is promoting a transition to eco-friendly and digital policies as a post-COVID economic recovery strategy, shows great interest in Korea's "Korean New Deal."
The Korea-Central America Free Trade Agreement (FTA), which includes five SICA member countries, came into full effect in March this year. Additionally, Korea joined the Central American Bank for Economic Integration (CABEI) in January last year, expanding the potential scope of cooperation not only in manufactured goods and agricultural and fishery products but also in infrastructure development. Furthermore, SICA member countries are traditional allies and consistently support the denuclearization of the Korean Peninsula and the peace process.
K-pop's popularity in Latin America and the region's view of Korea as a role model also send positive signals for cooperation. Notably, Costa Rica's President Alvarado, the chair of SICA, has expressed a desire for Costa Rica to become the "Korea of the Americas," and the president and first lady attracted attention by watching the film "Parasite." A photo of President Alvarado's son wearing a Red Devils T-shirt was also spotted on social networking services (SNS).
Taking this summit as an opportunity, Korea and SICA adopted a joint declaration and plan to expand comprehensive cooperative partnerships, strengthen high-level exchanges and cooperation, and broaden collaboration in infrastructure, digital, eco-friendly, and development cooperation. A Blue House official said, "This will be an opportunity to expand our diplomatic horizon to Latin America," adding, "We hope to strengthen our global role and elevate our international standing through diplomatic diversification."
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