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Mexico and South Korea have progressed in their commercial affairs since they began diplomatic relations in 1962. Currently, the possibility of negotiating a free trade agreement between both economies is being raised. The objective of this research is to evaluate the potential effects of such a trade agreement for both countries. For this, indexes of commercial intensity, revealed comparative advantages, complementarity, and commercial similarity are used. The results show that these two countries have intensified their trade relations, turning Mexico into South Korea's main trading partner in Latin America and giving rise to a complementary trade structure with advantages for Mexico in the trade of mineral fuels, lubricants, machinery, and transport equipment. Also, an asymmetry was found in the tariff rates that could generate commercial advantages, especially for Mexico in the primary sector in case of the signing of a free trade agreement. [ABSTRACT FROM AUTHOR]

Market diversification is one of the keys to success in the new era of world trade. Highly competitive countries have accomplished positive and sustained growth rates by not depending on a single market for their exports and imports. In Mexico, on the contrary, 80% of exports and 45% of imports concentrate in the United States. The South Korean market represents an opportunity for the Mexican economy, as the relationship between the two countries has strengthened in recent decades. This opportunity would promote greater economic growth for both countries if they reached a Free Trade Agreement, as we show in this work. The aim of this research is to assess the complementarity between these countries and estimate their external long-term equilibrium using the Thirlwall trade restriction model. Results confirm the existence of trade complementarity between the two economies and show that these are able to achieve long-term equilibrium in the external sector. Additionally, the Mexican economy would not face balance of payment constraints for growth when trading with South Korea, as it currently does with the United States. [ABSTRACT FROM AUTHOR]