Trade deal with India to go into effect Jan. 1

SEOUL, Dec. 15 (Yonhap) -- A trade pact with India will go into effect from Jan.
1, South Korea's trade ministry said Tuesday, adding that the accord will help
South Korean companies make further inroads into Asia's third-largest economy and
solidify their presence there.

The two countries started negotiations in March 2006 and initialed the bilateral
trade pact in February this year. The deal was ratified by South Korea's
parliament in early November
Under the deal, South Korea and India will eliminate or cut tariffs on goods over
the next 10 years, with the latter phasing out or reducing tariffs on 85 percent
of South Korean goods. The so-called Comprehensive Economic Partnership Agreement
(CEPA) covers services and investments, as well as competition and other issues.
Overall, the CEPA is expected to boost bilateral trade by as much as US$3.3
billion annually, according to estimates by the state-run Korea Institute for
International Economic Policy (KIEP).
Two-way trade increased 39 percent to $15.56 billion last year, with South Korea
logging a surplus of $2.39 billion.
South Korea exported $3.6 billion of goods to India and imported $1.6 billion in
the first six months of this year, according to the ministry.
Under the deal, tariffs on South Korean auto parts, the country's biggest trade
item, are to be reduced to as low as 1 percent over an eight-year period from the
current average of 12.5 percent. But both sides agreed to exclude fisheries and
some agricultural products -- including dairy, beef and pork -- from tariff
concessions.
The CEPA is the latest in a series of free trade agreements that South Korea has
concluded.
India will be the sixth country with which South Korea has signed a trade pact.
Seoul already has agreements with Chile, Singapore, the European Free Trade
Association and the Association of Southeast Asian Nations.
South Korea is in free trade negotiations with 11 countries, including Canada,
Mexico and Australia, to boost its export-dominated economy.
Last month, South Korea and the European Union initialed a similar trade deal
that they expect will be officially signed before March next year.
A free trade pact was signed with the United States in 2007, but is awaiting
ratification by the legislatures of both countries.
sam@yna.co.kr
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