Outcome of the second round of negotiations on the Korea-India CEPA
CEPA refers to a type of free trade agreement and is a term used to emphasize the comprehensive coverage of an agreement that incorporates the bulk of economic relations between the involved parties, including but not limited to trade in goods and services, investment, and economic cooperation.
This round of talks was the second phase of working-level negotiations on the conclusion of the CEPA, an agreement the two parties agreed to pursue in the summit meeting held last February. In this round, sector-based working group negotiations agreed upon during the previous round of talks were held for the first time, allowing the two parties to thoroughly discuss their respective issues of interest.
At the first round of negotiations held from March 23 to 24 in New Delhi, India the two parties agreed to form 7 working groups to deal with issues including trade in goods and services, investment, other regulations, and economic cooperation.
The two parties reconfirmed their commitment to an early conclusion of the Korea-India CEPA and agreed to overcome difficulties in the negotiation process based on mutual understanding, established through joint research efforts, of both countries' sensitive sectors.
The second round of negotiations was held for three days, during which, based on the draft agreement prepared by the Korean side, each working group specifically discussed the items of interest for both parties, such as the modality and extent of liberalization of trade in goods, the elimination of non-tariff barriers, rules of origin, and principles on liberalization of services and investment.
Regarding goods, Korea explained that it has been pursuing comprehensive and high level liberalization in this sector. In regards to services and investment, the two parties exchanged views on liberalization modality and regional government regulation lists.
The Korean delegation was led by Kim Han-soo, the Director-General of the FTA Bureau, and consisted of 30 representatives from relevant government ministries including the Ministry of Finance and Economy, Ministry of Commerce, Industry and Energy, Ministry of Agriculture and Forestry, and Ministry of Maritime Affairs and Fisheries. The Indian delegation was led by Dr. Khullar, the Additional Secretary of the Ministry of Commerce and Industry, and was composed of 10 government officials from the Ministry of External Affairs, Ministry of Commerce and Industry, and other related ministries.
The third round of negotiations is planned to take place in New Delhi this coming July.
The Korea-India CEPA is part of the Korean government's simultaneous FTA policy and is the first FTA being pursued between Korea and a BRICs economy. The parties aim to conclude the CEPA by the end of 2007.
The pursuit of a Korea-India CEPA results from Korea's selection of India and India's selection of Korea as a strategic post in South West Asia and North East Asia respectively.
The conclusion of a CEPA with India, a country that has recorded an annual economic growth rate of higher than 8% in the past 3 years and holds potential for vast future economic expansion, is expected to bring about a $3.3 billion increase in Korea-India trade and a $1.3 trillion increase in Korea's gross domestic product.
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