S. KOREA, INDIA AIM TO SIGN FREE TRADE DEAL BY END OF 2007

Tuesday February 7, 2006

SEOUL, Feb 7 Asia Pulse - South Korea and India announced Tuesday the start of negotiations aimed at signing a free trade deal by the end of next year, officials said.

South Korean President Roh Moo-hyun and visiting Indian President Abdul Kalam agreed to begin specific negotiations on the trade pact during a summit earlier in the day, the Ministry of Foreign Affairs and Trade said in a statement.

After the summit, South Korean Trade Minister Kim Hyun-jong and Indian Rural Development Minister Radhuvansh Prasad Singh made a joint announcement on the start of a Comprehensive Economic Partnership Agreement (CEPA).

Officials here say a free trade agreement (FTA) can have various names, and CEPA is one of them.

Once the deal goes into effect, South Korea would have greater access to the US$659 billion economy of India and its population of 1.05 billion people, the ministry said.

The deal is expected to increase two-way trade by 60 percent, or $3.3 billion, allow South Korea’s gross domestic product to grow by 1.3 trillion won ($1.34 billion) and create 47,600 jobs, it said.

In 2004, South Korea exported $3.6 billion worth of goods to India and imported $1.9 billion, resulting in a trade surplus of $1.7 billion, according to the ministry figures.

The ministry didn’t provide information on the effects an FTA with Korea would have on India.

India and South Korea are Asia’s third- and fourth-largest economies, respectively.

Last December, South Korea and India agreed to begin discussions on an FTA on the sidelines of a regional summit in Kuala Lumpur, Malaysia.

South Korea and India will begin the first round of free trade talks in March in India’s capital New Delhi, the ministry said.