SKorea, India sign broad agreement to boost trade

SEOUL, South Korea — South Korea and India signed a broad trade agreement Friday to slash tariffs on goods and services in a bid to increase commerce between two of Asia’s biggest economies.

South Korean Trade Minister Kim Jong-hoon and India’s Minister of Commerce and Industry Anand Sharma penned what the two sides formally called a Comprehensive Economic Partnership Agreement, but which South Korea is calling a free trade deal.

The trade ministers hailed the achievement. Kim said it was South Korea’s first free trade accord with one of the fast-growing BRICs countries — Brazil, Russia, India and China. Sharma said it was India’s first comprehensive trade agreement with a major economy.

Bilateral trade between the two countries reached $15.6 billion dollars last year and has been steadily growing. In 2002, it amounted to just $2.6 billion.

“We will be able to have access to one-sixth of the global market,” Kim said, adding the agreement “will open a significant opportunity as well as strengthen our relationship with India into the future.”

Sharma said the economic relationship between the two countries “has enormous potential to grow” and could double over the next 10 years.

“That’s what we are aiming at,” he said. “This is just the beginning.”

The deal calls for abolishing or cutting tariffs for 90 percent of Indian goods in terms of value and 85 percent of South Korean products and increases investment opportunities, Seoul’s Ministry of Strategy and Finance said in a statement.

It also allows for greater human resources exchanges between the countries, the ministry said, paving the way for Indian computer and software experts as well as English teachers to gain access to the South Korean market.

Negotiations for the deal began in February 2006.

Though the agreement has been signed, several steps remain on the South Korean side for it to take effect, such as ratification by the National Assembly, according to the ministry. India, however, has completed all necessary procedures for the deal to take effect, the ministry said.

The latest deal highlights South Korea’s national strategy of aggressively pursuing free trade agreements.

Seoul signed a free trade deal with the United States in 2007, though it has yet to be ratified by legislatures in both countries amid political sensitivities and suspicions regarding free trade among some lawmakers.

Seoul also has a free trade agreement with the Association of Southeast Asian Nations and said last month it has concluded negotiations with the European Union.

South Korea’s biggest trading partners include China, the EU, the U.S., ASEAN and Japan.