South Korea and Mongolia Tentatively Conclude Economic Partnership Agreement (EPA)... Strengthening Critical Mineral Supply Chains
The South Korean government recently reached a provisional agreement with Mongolia to establish an "Economic Partnership Agreement (EPA)." This agreement is expected to deepen economic cooperation between the two countries and pave the way for South Korean companies to enter the Mongolian market more easily. Moving forward, the two nations will act as closer economic partners.
The most notable part of this agreement is securing a stable supply chain for "critical minerals." Mongolia is known to be very rich in natural resources such as copper and rare earth elements. These resources are essential materials for manufacturing electric vehicle batteries and semiconductors, which are South Korea's key industries. Through this agreement, South Korea has secured a more stable supply of resources necessary for future industries.
Once the agreement officially takes effect, tariffs on many goods traded between the two countries will be lowered or eliminated. This will allow South Korean automobiles, home appliances, and various consumer goods to gain price competitiveness in the Mongolian market. Furthermore, the investment environment is expected to improve as South Korean companies will receive stronger legal protection when investing in Mongolia.
Meanwhile, some changes in the domestic economic situation are also noteworthy. Recently, in certain areas such as Hwaseong, Gyeonggi Province, real estate prices have been rising sharply in a short period. As housing prices skyrocket by hundreds of millions of won, cases are occurring where homeowners who had already signed sales contracts are unilaterally canceling them, even while paying penalties, necessitating caution in the market.
The government plans to finalize the agreement with Mongolia by completing the remaining procedures. This economic cooperation will serve as an important stepping stone for South Korea to expand its economic reach into Central Asia. Experts expect this agreement to be a significant help in strengthening South Korea's resource security and diversifying its export markets.