India to sign trade deal next week
Part of Korea’s efforts to tear down barriers to its exports, a trade pact with India will be signed next week, according to the Ministry of Foreign Affairs and Trade yesterday.
The two countries will sign the Comprehensive Economic Partnership Agreement on Aug. 7 in Seoul, three-and-a-half years after the start of official negotiations. The agreement, which got its unusual name at the request of the Indian side, is equivalent to a free trade agreement.
Auto parts are Korea’s biggest export to the subcontinent - Korea sold $1.13 billion worth to India last year - and firms in that sector will benefit from the deal. According to the Korea Institute for International Economic Policy, the CEPA is expected to increase bilateral trade by $3.3 billion and increase Korea’s gross domestic product by 1.3 trillion won ($1.05 billion). More details on the deal will be disclosed at the signing ceremony, the ministry said.
“The Korea-India CEPA will help Korea penetrate the vast market of India, the world’s second most populous country, earlier than other countries,” said a government official who declined to be identified.
The Korean government plans to submit a bill to ratify the pact to the National Assembly during the regular fall session. India has already ratified it, so the pact will take effect 60 days after it earns approval from local lawmakers. The Korean government estimates that will take place around Jan. 1.
The signing comes two weeks after Korea tentatively concluded a free trade agreement with the European Union.
Korea has already signed FTAs with Chile, Singapore, the European Free Trade Association, the Association of Southeast Asian Nations and the United States. The FTA with the U.S. has not yet been ratified by either of the two countries’ legislative bodies. Korea is also seeking FTAs with Australia, New Zealand, Canada and Mexico.
Kim Jong-hoon, Korea’s Trade Minister, and his Indian counterpart, Commerce and Industry Minister Anand Sharma, will attend the trade pact signing ceremony as the top representatives of the two countries, according to the ministry.
By Moon Gwang-lip, Lee Sang-ryeul [firstname.lastname@example.org]