Then there was a revival of Japan's interest in Latin America and active expansion of China. The period took place in the beginning of 2000s. During that time, South Korea has decided to suggest collaboration by acceptance of Free Trade Agreements. The first country South Korea has signed FTA with was Chile. Later it also signed FTA with Peru, Colombia and is negotiation on FTA with Mexico, while Japan has also concluded similar EPA with the same countries mentioned.

The crisis of 2008 has also influenced South Korea significantly. Global trade has decrease its pave giving an impact to South Korean export. At the same time, import increased in context of growing prices for energy sources.

By 2008 South Korea has already have strong ties with all economically beneficial partners. It experienced positive impact from its export diversification economic policy. Traditionally, South Korea relied a lot on the USA. Recently, South Korea has removed its focus from the USA to other partners. Therefore, issues in US economy led by 2008 economic crisis had less impact on South Korea. Decrease in US demand was not so crucial to South Korean export. It helped to recover faster.

To conclude, there is misbalance of economic spheres of South Korea. While agriculture is underdeveloped, industry succeeded. Service sector is heterogeneous. South Korea may benefit from such misbalance a mediator between developing and developed countries. Anyway, now it acts as an equal partner for developing countries in agriculture and acts as an equal partner for developed countries in trading in service sector. Therefore, South Korean market is liberalized in industrial and service sectors, while there is strong protectionism in agriculture. Consequently, South Korean trade policy is highly diversified.

As the volume of export increased there was a need for search for new markets. Traditionally, major export volume was directed to the USA and Japan. Nevertheless, new markets were to be found.

Therefore, the third wave of South Korea's economic expansion occurred. Since 2000s South Korea has changed its focus from multilateral liberalization and collaboration to bilateral ones Korgun I.A., Sutyrin S.F. (2015). South Korea's trade policy: choice of optimum pace of liberalization. P.16. There were two major reasons for changes towards bilateral economic collaboration. First of all, it was a consequence of growing pressure within WTO. Bilateral agreements enable the states to collaborate on equal basis without pressure of alliances.

Secondly, removed focus on bilateral liberalization was caused by crisis of 1997-1998. The crisis influenced many Asian countries that finally decided to cooperate to address appeared issues. Most of the countries influenced by crisis followed export orientation economic policy. It led to worse economic conditions because it faced limited export opportunities in context of crisis. Therefore, some countries decided to cooperate via bilateral agreements to store export volume in context of challenging macroeconomic conditions. Bilateral trade agreements provide new opportunities for export and remain some fields of local market secured from import.

Bilateral agreements also acted as a means for expansion of geopolitical role of the Republic of Korea. It allowed to conclude trustful relations with various countries and build more intensified economic ties with them. It also enables to combat competition with other countries not singed bilateral agreements. Therefore, South Korea has promoted their geoeconomical interests around the globe. South Korea's active bilateral trade policy triggered other countries to work on bilateral agreements as well. Furthermore, bilateral agreements may ensure security goals in the region.

In addition to that, integrative tendencies in Europe such as establishment of European Union also influenced the vision of South Korean government. Reduction of transportation costs and allocation of a cheaper labor force seemed attractive for South Korea possessing qualified but expensive labor force and limited by DPRK from the continent.

Nowadays, South Korea still has reasons for promotion of economic expansion abroad. Despite impressive economic breakthroughs, it has to find new sources of economic growth. To solve the issue, it is looking for possible markets to expand its export and investment.

South Korea's population is 50 million people. It is a small market for such a developed industrial state. Local market is not enough to enable economy with highly developed industrial sector perform well. For example, Japan's economic structure seems similar but its population is 130 million people. Therefore, South Korea has more need for economic expansion and is more vulnerable to world economy affairs. It is a further step of economic expansion.

Chapter 2

2.1 Institutional expansion

First free trade agreements were signed with countries fulfilling the following criteria: its agriculture is not highly competitive; its economic specialization is different from South Korea. Therefore, firstly South Korea has signed FTA with Chile and Singapore. It mostly had geopolitical significance rather than trade benefits. As Chile is not the major actor in world trade, it was a good partner to master negotiation and first attempts of bilateral collaboration.

It enabled South Korea to be prepared for negotiation with world major actors such as USA, China. Finally, South Korea succeeded to sign FTA with China in 2014. Currently, South Korea signed Free Trade Agreement with countries producing 77% of world GDP. It is aimed to expand its ties with producers of 90% of world GDP.

Increase of collaboration within FTA eliminates the risk of developing protectionism tendencies among trading partners and enables more options for free trade. It provides alternatives for manufactured goods promotion and new sources of supply. It therefore increases stability of economics and provide new markets for trade development.

Nowadays South Korea strongly rely on China and the USA which started to increase its protectionism policy, so market diversification is essential in context of changing geopolitical conditions. Recent intentions of the USA to renegotiate NAFTA and its withdrawal from Trans-Pacific Partnership reveals US negative attitude towards free trade cooperation. Furthermore, South Korea has to combat Japan and China's attempts to gain the leadership in the region.

In January 2019 the Minister of Trade has declared that there is a need for diversification of export destinations and targeting emerging markets such as Latin America Kim Y.S. (2019). Korea seeks to ease trade dependency on China, US, Japan. Retrieved on 14 April 2019 from URL: http://www.koreaherald.com/view.php?ud=20190127000079. It is also connected with the need to compete with China and Japan in the region.

Going back historical background, the Republic of Korea has started to negotiate on possible Free Trade Agreements and seek economic partners since 1999. It resulted into its first Free Trade Agreement with Chile in 2004. In 2019 there are 15 Free Trade Agreements signed by South Korea. 52 countries collaborate with South Korea via Free Trade Agreements, some countries joined FTAs as a member within group of states or organization. South Korea's FTA partners comprised 77% of world production in 2016 S. Korea to Seek More FTAs with Emerging Countries. 2017. Retrieved on 4 April 2019 from URL:http://world.kbs.co.kr/service/news_view.htm?lang=e&Seq_Code=126102. Now three Latin American countries including Chile, Peru and Colombia have FTA with the Republic of Korea that are in effect.

South Korea has started to study opportunities of Free Trade Agreements after the Asian crisis. It led to collaboration with Chile. Chile is the first country signed Free Trade Agreement with South Korea. Furthermore, South Korea became the first country among Pacific Rim which has signed Free Trade Agreement with a Latin American country. The Free Trade Agreement went into force in 2004.

As a result, bilateral trade increased four times, the most significant impact was felt in electronics and automobile industry. Now South Korea possess more than 30% of Chile's automobile market and about 70% of its electronics. Therefore, South Korea has become one of four major Chile's trading partners in 2018, following China, the USA and Japan Chile's Top Trading Partners. Retrieved on 28 March 2019 from URL:http://www.worldstopexports.com/chiles-top-import-partners/. The mutual trade increased from $1.57 billion in 2003 to $4.4 billion in 2018 Ibid..

Furthermore, Chile presents and unusual case for South Korea among other Latin American countries. South Korea has significant positive trade balance with the majority of Latin American countries, while it has negative trade balance with Chile possessing rich mineral resources South Korea lacks.

It should be also mentioned that the most significant impact was made on small and medium enterprises, while large companies did not notice changes. The reason for that is the fact that export ties of large companies are stable, while small enterprises got new export opportunities. In 2011 most imported items in Chile were South Korea's manufactured goods.

In the end of 2016 Chile and South Korea signed joint declaration of deepening of exiting FTA Chile-Republic of Korea. Retrieved on 29 March 2019 from URL:http://www.sice.oas.org/TPD/CHL_KOR/CHL_KOR_e.ASP. As the market conditions during the last 15 years has changed, both sides have decided to update their agreements. It will also help to negotiate new possibility for market access to emerging sectors.

Negotiations on South Korea-Peru Free Trade Agreement has started in 2009 and signed in 2011. After South Korea - Peru Free Trade Agreement went into effect, South Korean export to Peru increased 29% during the next two years mostly because of electronics. For example, export of television has increased 268% Peru: The South Koreans are coming. Retrieved on 25 March 2019 from URL:https://www.ft.com/content/58b28877-42b4-37a5-b727-ce034e77fc5c. Nevertheless, South Korean Ambassador admits that mutual trade volume is still far from its potential South Korea: Peru, investment gateway to South America. Retrieved on 14 Marc 2019 from URL:https://andina.pe/agencia/noticia-south-korea-peru-investment-gateway-to-south-america-707914.aspx. South Korea promotes the idea that it had help to industrialize Peru's export and help to expand Peruvian export not only to South Korea but to other Asian countries as well. At the same time, Peru also acts for status of a gateway to Latin America for South Korea.

Colombia is the third Latin American country signed FTA with South Korea. South Korea is actually the only Asian country signed FTA with Colombia. Colombia is the third Latin American country after Brazil and Mexico in terms of population, which is relatively close to South Korean population. The FTA went into force in 2015. South Korea is still the only Asian country signed FTA with Colombia. The countries concluded on five prioritized field of collaboration which include information and communication technologies, industrial development, regional development, transportation, handling post-conflict environment Lee J. (2018). `Colombia-Korea ties to expand through FTA, Pacific Alliance'. Retrieved on 14 March 2019 from URL:http://www.koreaherald.com/view.php?ud=20181224000705&ACE_SEARCH=1. The FTA enabled to eliminate tariffs on 200 types of products so that trade volume reached $1.25 billion in 2017 Ibid..

Colombian major interest in collaboration with South Korea is connected with South Korea's possible investments into infrastructure, security and electronic government. The reason for that is current Bogota subway construction, working on cybersecurity and smart city development projects Ibid..

After the FTA entered into force, South Korea eliminated duties for import of Colombia's coffee for a period of three years, while Colombia has eliminated duties on South Korea's automobiles for a period of a decade. South Korea has positive trade balance with Colombia, South Korea's export significantly prevail over import. It usually imports agricultural products and coal, and export electronics, cars and materials there. Colombia is South Korea's top six major source of import within Latin America South Korea: Trade Statistics. Retrieved on 8 May 2019 from URL:https://globaledge.msu.edu/countries/south-korea/tradestats.

South Korea still did not sign FTA with Mexico, though mutual trade volume reached more than $15 billion in 2017. Korea became Mexico's sixth largest trading partner in 2017 Lee J. (2018). Mexico-Korea commerce set for smooth sailing. Retrieved on 22 March 2019 from URL:http://www.koreaherald.com/view.php?ud=20180917000718&ACE_SEARCH=1. South Korea has already invested $5.6 billion in Mexico, more than 1800 South Korean companies operates there Lee J. (2018). `Mexico, Korea can blaze trail in global free trade regime'. Retrieved on 22 March 2019 from URL:http://www.koreaherald.com/view.php?ud=20180604000854&ACE_SEARCH=1. The relations are being developing quickly. Mexico considers South Korea as a top eight trading partner in terms of export and top five partner in terms of import.

Mexico was the first Latin American country signed an agreement on strategic partnership with South Korea Faure A. (2016). South Korea's All-Out Economic Diplomacy in Mexico. Retrieved on 30 March 2019 from URL:https://thediplomat.com/2016/04/south-koreas-all-out-economic-diplomacy-in-mexico/. South Korea presidents committed state visits to Mexico in 1991, 1997, 2002, 2005, 2010, 2012 and 2016. Direct flights between Seoul and Mexico City were implemented in 2017. The countries might get more opportunities for trade if South Korea join Pacific Alliance as an associate member, which include Chile, Peru, Colombia and Mexico. Now South Korea possess only the position of observer in this trade block.

Both countries have strategic location. South Korea perceives Mexico as a gateway to North American market, while Mexico perceives South Korea as an access to Western countries. Furthermore, both countries are strongly reliable on the USA and are vulnerable to Trump's protectionism measures. Recently Mexico has liberalized its energy sector, which was nationalized in 1960.

Earlier negotiation on Korea-Mexico FTA launched in 2006 was stopped in 2008 after the second round of negotiations. The major reason was concerns of Mexico's automobile industry about possible negative impact of developing free trade with South Korea Swire M. (2015). S Korea Looks To Restart FTA Talks With Mexico. Retrieved on 1 April 2019 from URL:https://www.tax-news.com/news/S_Korea_Looks_To_Restart_FTA_Talks_With_Mexico____69753.html. On the other hand, the same threat was mentioned by agricultural sector of South Korea in case of signing FTA with Mexico `Mexican FTA talks looking bright'. Retrieved on 24 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20130908000296. Now the countries are intending to restart negotiations on FTA.

On February 2018 South Korea has also signed FTA with a group of five Central American countries including Nicaragua, Panama, El Salvador, Costa Rica and Honduras Central America-South Korea FTA. Retrieved on 15 March 2019 from URL:https://aric.adb.org/fta/korea-central-america-fta. It is expected to go into effect soon. The FTA will eliminate duties on 95% of trade between the regions South Korea will sign trade deals with five Central American countries. Retrieved on 25 March 2019 from URL:https://www.cnbc.com/2018/02/20/south-korea-will-sign-free-trade-deals-with-five-central-american-countries.html. It is expected it will help to promote South Korea's electronics and automobile sectors Ibid.. The benefits the FTA provides to Central American countries is that it is expected to ease its export of textile, agricultural and marine products to South Korea South Korea, Central American nations sign free trade agreement. Retrieved on 27 March 2019 from URL:https://www.efe.com/efe/english/business/south-korea-central-american-nations-sign-free-trade-agreement/50000265-3530266. It should be also mentioned that China and Japan do not have FTA with Central America Ibid..

Though the FTA will be in effect within a group of states, agreements with each country and South Korea may go into effect at different time because the decision is independent in each country of Central America. Ratification process may require different time in each country.

Earlier Guatemala was also considering FTA with South Korea within the group of Latin American countries. Nevertheless, the conditions offered by South Korea considering cement, metallurgy and coffee did not satisfy GuatemalaFTA with South Korea: Never Ending Story. Retrieved on 10 April 2019 from URL:https://www.centralamericadata.com/en/article/home/Struggle_for_FTA_with_South_Korea_Continues. The issue is the most acute in case of coffee. Guatemala believes that such FTA will lead to decreasing market share of local producers because it is not ready to face such competition Coffee, Guatemala and the FTA with South Korea. Retrieved on 10 April 2019 from URL:https://centralamericadata.com/en/article/home/Caf_Guatemala_y_el_TLC_con_Corea_del_Sur. National Coffee Association promotes its vision on possible negative impact to the Ministry of Economy.

Now Guatemala exports 23% of its coffee production to South Korea, China, Japan and Taiwan Ibid.. In 2018 Guatemala has stopped talks on economic cooperation on FTA with South Korea. Guatemala is the only country is Central America not willing to negotiate on FTA as a part of Central America with South Korea. It is looking for starting negotiating from scratch separately from Central America and to discuss new conditions.

Though FTA with Central American countries is not yet in effect, there are large plan on mutual marine project with South Korea Kim Y.S. (2018). Korea expanding cooperation with Latin America on cruise-logistics ports. Retrieved on 3 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20181210000223&ACE_SEARCH=1. It would benefit to logistics and tourism industries. Joint Central American coastline development will intensify ties with Central America, reveal positive outcomes of newly established Free Trade Agreement and strengthen South Korea's position there.

Since September 2018 South Korea is also negotiating on Tree Trade Agreement with MERCOSUR which includes Argentina, Brazil, Uruguay, Paraguay and Venezuela. It is a large world market which could be an alternative to protectionism tendencies on US and China's markets. MERCOSUR present a really large market which consists from 290 million of population. It comprises 70% of total population of all South American countries. It also produces 76% of South America's GDP Leaders of Korea, Argentina agree to improve ties, support FTA negotiations. Retrieved on 5 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20181202000009&ACE_SEARCH=1.

It might improve declining trade volume between MERCOSUR and South Korea, as it comprised $10.3 billion in 2016, though it was two time more in 2011 reaching $20.8 Korea, MERCOSUR to launch trade talks in first half. Retrieved on 5 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20170303000256&ACE_SEARCH=1. The major reason for decline in bilateral trade volume is rising protectionism policies, so FTA can solve major issues in economic cooperation. There were already been attempts on MERCOSUR-South Korea Free Trade Agreement conclusion in 2004, but negotiations were frozen.

Various steps are being made to intensify relations with MERCOSUR. For example, in order to intensify ties between South Korea and Argentina, the countries agreed on “working holiday” mutual visa regime in the end of 2018, providing an opportunity for young people of both countries to study, travel and work in South Korea and Argentina Korea, Argentina sign working holiday visa deal. Retrieved on 7 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20181203000643&ACE_SEARCH=1. The agreement will go into effect in June 2019. Such programs enable to better understand insides of other country's business culture in order to develop economic relations easier in future. South Korea has established strategic partnership in 2004 when Roh Moo Hyun committed a state visit to Argentina.

South Korea also negotiates on Free Trade Agreement with Ecuador. The negotiations were launched in August 2015, but there were no significant advances since that S. Korea, Ecuador declare launch of FTA talks. Retrieved on 7 May 2019 from URL:http://www.koreaobserver.com/lead-s-korea-ecuador-declare-launch-of-fta-talks-46258/. The Free Trade Agreement is not concluded. If the countries agree on FTA, South Korea will become the first Asian country signed FTA with Ecuador. Actually, the countries have decided on other framework of cooperation via Strategic Economic Cooperation Agreement. It should encourage cooperation in mining, geology, agriculture, geographical information, electronic government, etc Lee J. (2018). `Ecuador seeks SME cooperation with Korea'. Retrieved on 1 May 2019 from URL:http://www.koreaherald.com/view.php?ud=20180813000170&ACE_SEARCH=1.

To conclude, South Korea continues eliminate trade barriers by negotiating new Free Trade Agreements. It is an important step towards economic expansion in order to increase the revenue of export oriented policy and to sustain economic indexes. Now South Korea has Free Trade Agreements with countries comprising 77% of world's GDP and intends to continue FTA negotiations with other economic actors.

2.2 Trade expansion

Before 1980s the trade volume between South Korea and Latin America was insignificant. The major obstacle for trade development between the regions was not only distance and differences in business culture but mostly import substitution policy which most Latin American countries followed in 1960s-1970s. Protectionism measures were widely used to protect Latin American market from more competitive goods from abroad. Therefore, trade volume between Latin America and South Korea was extremely small; South Korea had negative trade balance with Latin American countries.

Nevertheless, in 1990s economies of Latin American countries gain more stability, became more liberalized and integrated into regional and world trade. These factors made Latin America more attractive for South Korea. Despite numerous obstacles, Latin America possessed cheap labor force, abundance of natural resources and agricultural facilities which South Korea lacked.

Furthermore, Latin America's geopolitical role was increasing within sub-regional integrative alliances such as MERCOSUR. It was a significant step for economic liberalization provided free trade within alliance members. Consequently, South Korea perceived Latin America as a trading partner with a high potential. At the end of 1990s a special Institute for South America and the Caribbean was established in South Korea in order to study and develop beneficial economic policy towards Latin America Lexutina Y.V. (2016). Latin America and the Republic of Korea: Trade and economic aspects of collaboration in 1948-2015. P. 35.

Before 1990 Latin America was mostly perceived as a resource base which South Korea lacked. Furthermore, there was no opportunity to develop export to Latin America because of protectionism policy in most of Latin American countries. But since 1990s trade balance between South Korea and Latin America has changed. South Korea was looking for new markets to sale its growing production for export to ensure economic growth while Latin American economy became more mature and competitive and started market liberalization.

Trade volume has experienced a steep rise since the beginning of 1990s. But it was slowed down in 1997 when Asian financial crisis happened. Since 1990 till crisis trade turnover increased from $3.8 billion till $13.4 billion in 1990 and 1996 respectively Kim W.H. (2000). East Asian-Latin American Economic Relations: A Korean Perspective after the International Financial Crisis. p.20..

After 1990 South Korea gained positive trade balance with Latin America. South Korea's major trading partners in 1990s were Brazil, Mexico, Chile, Peru, Panama. Therefore, South Korea successfully collaborated with two largest Latin American economies; two countries abundant in natural resources South Korea will soon sign Free Trade Agreement with; and a strategically located Panama, which regulates transportation channel.

The steepest rise in export to Latin America was made with Brazil. Though South Korean export there comprised only 0.24% in 1990 which was less than export to small Panama, in 1997 export to Brazil comprised 1.25%. Trade relations with Mexico was stable and share of export did not change during the period discussed storing the level of 1.08%.

As for import from Latin America, the major breakthrough was made in collaboration with Peru. Though Peruvian share of South Korea's import was insignificant comprising 0.02% in 1990, it increased till 0.22% in 1997. Import from Chile has also risen from 0.46% till 0.8% of South Korea's import in 1990 and 1997 respectively. At the same time the share of import from Brazil and Mexico decreased. It means that in 1990s South Korea was focused on mineral resources extraction to ensure its industrial production and promotion of value added goods export to large economies with high demand.

Asian crisis has slowed down mutual trade. During 1997-1998 South Korea has significantly decreased its import of commodities. It led to decrease of South Korean import from Latin America. Despite import decrease, South Korea export to Latin American countries remained at almost the same level. Therefore, import volume from Latin America decreased 46.1% during one year in 1998, while mutual trade volume decreased just 13.2%. Consequently, import volume hit by crisis in 1998 was just $2.2 billion, trade volume comprised $11.1 billion the same year Counted by Korea International Trade Association..

South Korea succeeded to quickly recover and combat the outcomes of the crisis. Since 1999 the import from Latin America has started to grow, which, consequently, increased the volume of mutual trade. Therefore, indexes of trade volume before the crisis was almost reached in 2001. The trade volume in 1996 was $13.4 billion while in 2001 trade volume comprised $13.2 billion.

It should be also mentioned that though during the crisis the trade volume with Latin America has decreased, the share of Latin America in South Korean foreign trade structure did not change significantly. Since 1996 till 1999 it fluctuated from 4.4% to 4.9% of all South Korea's foreign trade. Crisis did not reduce the role of Latin America as an economic partner. Consequently, Latin America gained the position of an important trading partner for South Korea. To conclude, in comparison with investment flow, mutual trade volume was not influenced much by the crisis.

The further wave of steep rise of trade relations started in 2004. During 2004-2011 the trade volume has increased more than three times. It comprised $18 billion and $60 billion in 2004 and 2011 respectively. Since 2012 there was a small slump in trade volume, but it has stabilized on the level of $55 billion.

Modern trade development tendencies are presented on the graph below.

Sources: Lexutina Y.V. (2016). Latin America and the Republic of Korea: Trade and economic aspects of collaboration in 1948-2015; https://data.worldbank.org/ - retrieved on 3 May 2019.

The import from Latin America is always approximately two times less than export. Consequently, South Korea perceives Latin America as a market for export sales and a source of commodities if analyze trading relationships. South Korea's trade balance is always positive in relations with Latin American region since 1990s. Export orientation is a core of trading strategy to Latin American market. Generally, expansion of trade volume in 2000s was caused by two factors: increase in prices for commodities and expansion of South Korean export to Latin America.

The reason for success of South Korean export was the composition of export. South Korea mostly promoted high tech electronics which does not have competition with local Latin American manufacturing. Therefore, it was beneficial for Latin American market and did not cause trade conflicts. It seems more beneficial for Latin American region in comparison with China's export flows which usually consists of goods facing strong competition with locally produced Latin American goods.

The major export destinations are largest Latin American markets Brazil and Mexico. In the period of 2007-2014 export share to these countries comprised 23.5% and 41.4% respectively. As the time goes by South Korea attempts to diversify its export destinations. Therefore, in 2014 the share of Mexico and Brazil has changed to more equal figures of 30.2% and 24.9% respectively in 2014. Nevertheless, Mexico's and Brazil's markets are so large and constitute of a comparatively larger middle class so that it still has larger share in comparison with other countries. For example, the third larger trading partner in 2014 was Panama, those export share was 7.7%.

The other reason for Mexico's and Brazil's large share was a steep rise in export to Mexico happened in 2006 and export increase to Brazil in 2009. The export volume is really quite large so that if compare Mexico's role among all world export partners of South Korea, Mexico ranks 8-14 positions since 2006. Brazil also ranks high possessing 10-14 positions since 2009.

The modern export structure changed, though Mexico is still on the leading position. South Korea tries to improve trading balance with its major partner in terms of import Chile. Peru plays also an important role among South Korean export destination. It might be a positive impact of Chile-South Korea FTA.

The main sources of import are Chile, Brazil, Mexico, Peru, which constituted 79% of all import from Latin America. The import mostly constitutes of mineral resources, agricultural goods industrial production. The share of industrial products import is larger in comparison to China's and Japan's import. Consequently, South Korean import seems more beneficial for Latin America's industrial development. In addition to that, opportunity of industrial production export not only provide development for Latin America but also makes more revenue. The major items of import from Latin America are automobile parts, chemicals, telecom.

Despite that, South Korea's export to Latin America significantly prevails import from most countries of Latin America. The only exception are the countries rich in natural resources. Import usually prevails over export in relations with Chile, Peru and Bolivia and Trinidad and Tobago South Korea: Trade Statistics. Retrieved on 10 May 2019 from URL:https://globaledge.msu.edu/countries/south-korea/tradestats. It should be mentioned that with first two countries mentioned above South Korea has signed Free Trade Agreement. These countries are important sources of South Korean industry.

Sources: Lexutina Y.V. (2016). Latin America and the Republic of Korea: Trade and economic aspects of collaboration in 1948-2015; https://data.worldbank.org/ - retrieved on 3 May 2019.

Actually, South Korea make attempts to improve trade balance with the countries mentioned, but the task is challenging. These countries provide commodities needed for South Korean key industries. South Korea has no chance to substitute its needs. At the same time, South Korea tries to increase export of electronic, cars and other high value added goods. For example, after South Korea-Chile FTA went into effect, South Korea succeeded to get 30% of Chile's automobile market. Nevertheless, the competition on Chile's automobile market is high. Japanese automobile export substitutes South Korean production. Therefore, while the import of Japanese cars increased 14.2%, South Korean cars import declined 13.5% in 2016 Shim W.H. (2017). Korean automakers' sales retreat in Chile. Retrieved on 14 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20170904000913&ACE_SEARCH=1.

The pace of Latin America's import from South Korea increase is faster in comparison with export increase. For example, the share of South Korea in Latin American import rose from 1.8% in 2000 to 3.1% in 2013. The share of South Korea in Latin American export rose from 1.1% to 1.3% in 2000 and 2013 respectively Economic relations between Latin America and the Republic of Korea: advances and opportunities, Santiago, ECLAC, (2015), p. 27. Retrieved on 5 March 2019 from URL: https://repositorio.cepal.org/bitstream/handle/11362/37919/S1500286_en.pdf?sequence=1&isAllowed=y .

Nevertheless, South Korea succeeded significantly in strengthen its position in Latin America's market. The biggest breakthrough happened in import from Bolivia. South Korea became Bolivian 6th major export destination in 2014, while it possessed only 25th position in 2000 UN Comtrade. Retrieved on 10 May 2019 from URL:https://comtrade.un.org/.

South Korean government search for more opportunities in the region. Recently new opportunities revealed in collaboration with Latin America because the USA withdrew from Trans-Pacific Partnership.

In 2017 South Korea's Ministry of Foreign Affairs has sponsored a conference on relations of South Korea and Latin American region. It allowed governmental representatives and businessmen discuss possible opportunities for both sides. Numerous governmental institutions are involved into conference from South Korean side: Ministry of Strategy and Finance of Korea, Korea Trade-Investment Promotion Agency, Export-Import Bank of Korea, etc Korea-LAC Business Summit. Retrieved on 14 March 2019 from URL:http://korea-lac.com/. Working languages are English, Korean, Spanish and Portuguese. It was created in context of USA withdrawal from Trans-Pacific Partnership. The fact made US leading position in relations within the region unsteady, many countries try to shape their policy based on each other not on USA leading role Sabatini S. (2017). South Korea: The other Asian country interested in Latin America. Retrieved on 10 April 2019 from URL:https://theglobalamericans.org/2017/07/south-korea-asian-country-interested-latin-america/.

To conclude, Latin America is an important export destination for South Korea. In addition to that, some Latin American countries are an important source of South Korea's import. Nevertheless, South Korea has a positive trade balance with the majority of Lain America's countries. Overall South Korea's export to Latin America 1.5-2 times prevail over its import during the last two decades.

2.3 Investment expansion

During 1960-70s Japan was almost the only Asian investor in Latin America. Other Asian countries' input was insignificant. During 1980s Japan also has reduced its investment in context of decline of Latin America. But since 1990s both South Korea and China has started to actively invest into Latin America.

South Korea has increased its investment into Latin American countries due to the several reasons. First of all, growing wages in South Korea forced to search for cheaper labor force. In 1980s increased expenditure on labor force made South Korean manufactured goods more expensive and, consequently, less competitive. Global integration processes and South Korea's more active performance in GATT/WTO since the middle of 1985 led to consciousness of benefits of world labor division based on a country's specialization. It led to external resources allocation.

Secondly, most Latin American countries experienced an economic rise after “lost decade”. Economic conditions became for stable and made it possible for long-term collaboration. Middle class increased, it made Latin American market more beneficial for export flows providing more demand for imported goods.

Thirdly, South Korean economy accumulated enough money to invest abroad and became more intensively integrated into global economy. As living standards increased, savings increased as well. Savings are the source for investment. Furthermore, because of pressure from the USA and European Union within GATT collaboration South Korea has started to play a more active role in world economic policy. It became integrated deeper in world economic relations and worked on establishment of multilateral ties.

Furthermore, investment to Latin America was a way to get into the US market. For example, the USA has implemented preferential policy towards Central American countries based on Caribbean Basin Initiative established in 1984. It enabled Central America to export a wide range of products to the US market without customs duties. Such preferences have attracted South Korean investments into Central American countries by perspective of expansion to a large US market. Major share of investment into Central America in 1980s were directed to Panama, Costa Rica, Guatemala, Jamaica. Though the volume of investment was small, it helped to establish closer ties with the region and contribute to further increase in trade and investment relations.

Finally, investment regulation was changed in order to follow global economic tendencies and capitalize savings. Actually, the government has announced a plan for investment liberalization in 1993. It was planned to ease investment during the following five years. In order to attract inward investment, 132 out of 224 sectors of South Korean economy was liberalized Nicolas F., Thomsen S, Bang M.H. Lessons from Investment Policy Reform in Korea. Retrieved on 1 May 2019 from URL:https://www.oecd.org/daf/inv/investment-policy/WP-2013_2.pdf. At the same time, regulations for investment abroad were eased in 1994 Lexutina Y.V. (2016). Latin America and the Republic of Korea: Trade and economic aspects of collaboration in 1948-2015. P. 35. Getting allowance from the government for foreign investment was not required anymore.

Regional integration processes increase attractiveness of the region for investment. Actually, the first investment ties were established with Central America because of Caribbean Basin Initiative. The second wave of investment was caused by Mercosur establishment in 1991. Therefore, the focus was removed to South American countries. Investment strategy has changed as well. As the market of Mercosur countries is larger and more demanding, investment was a way to enter the market of this countries. There were no initiatives to expand to some other country's market via investment to Mercosur.

North American Free Trade Agreement established in 1994 has also attracted South Korean investment. The strategy combined both previous two strategies. Firstly, Mexico seems attractive because of neighboring US market which was a member of NAFTA as well. So investment ties with Mexico can be used as a way to export to the third country via intermediary country. Secondly, Mexico's market is large and demanding enough to be a destination for South Korean export. Consequently, in 1995-1998 Mexico became the major destination for South Korean investment though in 1991-1994 it possessed the third place after Panama and Argentina Ibid..

The foundation for investment collaboration was laid during South Korea's leaders state visits to Latin America. The first Latin American country visited by South Korean president was Mexico. Roh Tae Woo visited Mexico in 1991. Five years later Kim Yong Sam also visited Chile, Argentina, Brazil, Peru, Guatemala and Mexico again. South Korean businessmen joined Kim Young Sam during the state visit to study investment opportunities.

During the state visits mentioned above numerous agreements on economic collaboration were signed. Most of them were devoted to investment fostering. Furthermore, the leader has discussed the implementation of several investment projects in the field of mining, electronics, automobile, telecom Ibid.. Consequently, South Korean investment into Latin American countries has increase significantly after state visits in the second half of 1990s. It reached $614 billion of accumulated investment into Latin America in 1997, comprising 11.7% of all South Korean foreign direct investmentKim W.H. (2000). East Asian-Latin American Economic Relations: A Korean Perspective after the International Financial Crisis. p.20..

Nevertheless, rise in relations with Latin America has slowed down because of the Asian Crisis happened in 1997. Some projects were cancelled or frozen for a long period of time. In 1998 South Korea's investment volume has decreased twice in comparison to 1997.

Crisis has changes the structure of South Korean investment to Latin America. Large enterprises were almost the only investors to Latin America before 1997. Large enterprises faced the major impact of the crisis and significantly reduced investments concentrating on debt resolution. But small and medium has started to invest into Latin America. It saw an opportunity in changing hit by crisis Asian market and were able to invest. Anyway, the major impact of crisis was perceived in investment collaboration with Brazil, Chile and Argentina Ibid..

South Korean investment into Latin America can be considered as diversified. If analyze 1998 statistics, a half of investments were directed into processing industry, 14% were directed into trading, 13% were directed into mineral resources extracting industry, 5% were directed into fisheries Ibid.. It was more diversified in comparison to neighboring rivals China and Japan, which are focused on extractive industries.

The wave of increase in investment into Latin America after crisis started in 2004. South Korean investment volume has increased 8 times during a decade since 2004. The pace of South Korean investment flow was higher than Chinese pace of investing till 2012. Nevertheless, even if the pace of investment is high, the amount of investment is still not so significant. Accumulated South Korea's investment accounted $43.4 billion in 2015. Accumulated investment into Latin America comprises more than 10% of all South Korea's investments.

Nowadays South Korea still promotes the idea of its diversification of investment into Latin America. It presents South Korean investments as more beneficial than capital flows from China and Japan. A large amount of South Korean investment is directed into manufacturing sector including automobile, high tech electronics, textile and clothing, while China's 85-90% of investment is directed into extraction of mineral resources.

Nevertheless, investment in manufacturing are directed to Brazil, Mexico and Central American countries, which are major destination for South Korean investment. Consequently, some countries get investment only into extraction, others get investment into manufacturing, etc. Offshore zones attract South Korean investment into finance and insurance. Therefore, the type of South Korean investment depends on the sector South Korea decided attractive in a particular country. In other words, each country has a specialization in context of South Korean investment.

Collaboration with South Korea in context of investment might be seen beneficial for Latin American countries for several reasons. First of all, it provides technology, knowledge and management system that is better than provided from China. It leads to growing possibility to create more jobs and build high technology manufacturing. Secondly, it is an alternative economic partner with high potential counterbalancing deeply penetrated China and Japan Aymes J. Korea's Engagement in Latin America. Retrieved on 14 April 2019 from URL:http://www.keia.org/sites/default/files/publications/kc_aymes_rev.pdf.

Nowadays South Korea is looking forward cooperation with Central American countries in construction projects. South Korea's Ministry of Transportation and Construction declared its interest in development of collaboration in infrastructure construction in 2017 Korea targets Central America's infrastructure projects. Retrieved on 16 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20170119000272&ACE_SEARCH=1.

Last December South Korea has decided on joint marine project with Central American countries Kim Y.S. (2018). Korea expanding cooperation with Latin America on cruise-logistics ports. Retrieved on 10 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20181210000223&ACE_SEARCH=1. It should become an outcome of new FTA which will go into effect soon. South Korea intends to invest into coastline infrastructure development, including passenger terminals improvement and harbor modernization. It will benefit to South Korea's expansion into tourism and logistics industries of Central American countries. Special talks were held with Nicaragua on joint collaboration on harbors infrastructure improvement.

Honduras has also expressed its interest in cooperation with South Korea in energy sector to improve energy efficiency S. Korea, Honduras agree to cooperate in energy and climate change. Retrieved on 26 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20150720000745&ACE_SEARCH=1. Costa Rica has proved its intension for construction cooperation, providing the cases of construction of a new airport and bridges maintenance, and declared the willing for cooperation in textile industry as well Korea, Costa Rica FMs hope for stronger business ties. Retrieved on 24 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20151201000896&ACE_SEARCH=1. Furthermore, in context of South Korea-Central America FTA signed, Costa Rica opened its Trade-Investment Promotion Agency in Seoul. There is a large project connecting South Korea and Panama since 2010. Hyundai participated in installing hydraulic systems for the Panama Canal expansion which was completed in 2018 Hyundai Samho completes Panama Canal contract. Retrieved on 24 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20160622000714&ACE_SEARCH=1.

Major South Korean investment into Peru are directed to natural resources extraction, energy, tourist infrastructure, transportation. Therefore, SK Innovation has invested into natural gas project. Other companies invested into tourist destination Cusco infrastructure development, subway in Peru's capital Lima, various Peruvian ports, cleansing systems for marine objects, hydroelectric plants.

South Korea promotes its investment as an opportunity to share technology and knowledge. For example, Korea Aerospace Industries will coach experts from Peru during four jets construction in South Korea and then remove jets construction to Peru. Collaboration between a country possessing technology and country rich in natural resources seems economically beneficial.

South Korean Posco which is 5th larger steelmaking company has signed a contract to use mining equipment in Argentina in 2018 Cho C.U. (2018). Posco acquires tenements in Argentina for lithium extraction. Retrieved on 18 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20180827000598&ACE_SEARCH=1. Posco continues looking for opportunities in non-steel sector projects. The contract provides the rights for a huge area of Argentina's salt flat. The salt area is used for lithium production. The manufacturing on Argentina's area is processed by Australian company Pilbara Minerals. Extraction will start from 2020. To fulfil manufacturing goals, Posco will create facilities in Argentina Kim B.G. (2018). Posco buys 4.75% shares of Australian lithium producer. Retrieved on 17 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20180227000755&ACE_SEARCH=1.

South Korea and Brazil has deep economic ties for a long period of time. 2016 was a significant year of South Korea-Brazil investment relations. In June 2016 South Korean steelmaker Dongkuk Steel Mill has started operation of its plant in Pecem City, Brazil. The plant was constructed by a joint efforts of two South Korean companies CSP Steel Mill possessing 50% share, POSCO possessing 30% share and Brazilian mining company Vale with 20% share respectively. Investments into the construction achieved $5.5 billion since 2012 Seo J.Y. (2016). Dongkuk Steel Mill starts operation of steel plant in Brazil. Retrieved on 21 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20160612000206&ACE_SEARCH=1. Actually, the project had negative effect for POSCO rating because of the higher cost of construction POSCO E&C downgraded by Moody's. Retrieved on 22 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20160902000680&ACE_SEARCH=1.

In 2016 South Korea and Brazil participated in a joint liquefied natural gas supply project. The project was aimed at floating storage gas unit removal from Brazilian Pecem City port on the shore. Therefore, the countries were working on liquefied natural gas business solution model as well.

Furthermore, Hyundai has built a railway production line in Brazil in 2016. It enabled to enter large South American railway market. Annual capacity of a production line is assessed to be 200 train units.

Posco has agreed to collaborate via joint venture with Samsung in Chile's electric battery business Cho C.U. (2019). Steel giant Posco eyes biopharma. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20180401000116&ACE_SEARCH=1. Both companies have invested $54.2 million Song S.H. (2018). Posco, Samsung SDI win electric vehicle battery project in Chile. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20180311000152&ACE_SEARCH=1. Manufacturing starts in 2021. Chile is the largest source of lithium needed for high tech industries' manufacturing. Chile's mineral resources are valuable for many large economies including China and Japan and South Korea is trying to secure its rights in Chile's mineral resources field. Posco is acting for lithium mining and processing business rights security Hin J.H.(2018). Korea's `zero' interest in hunt for minerals leave tech firms vulnerable. Retrieved on 30 April 2019 from URL:http://www.koreaherald.com/view.php?ud=20180226000704&ACE_SEARCH=1.