Assembly approves trade pact with India

From news reports



The National Assembly yesterday ratified a comprehensive economic partnership agreement with India, opening the way to the elimination or lowering of tariffs on more than $15 billion in annual bilateral trade with Asia`s third largest economy.

The trade pact, which does not require ratification by India, could nearly double the volume of trade between the two sides, India`s trade minister said.

Korea and India concluded the CEPA in early August to cut duties on such goods as auto parts and electronics, and to boost cooperation between the two Asian economic powerhouses. The accord will likely take effect on Jan. 1 next year.



The deal is the first by India with a developed economy and Korea`s eighth free trade pact, including deals to open up markets with the United States and the European Union that have yet to be implemented.

The pact with the European Union is expected to be approved by Korea`s parliament much quicker than the U.S. deal, which has also been unpopular with some Democrats in the U.S. Congress.

The Korea-India deal will eliminate tariffs on three quarters of India`s imports from Korea by value, and more than 80 percent of Korea`s imports from India.

Bilateral trade between Korea and India reached $15.6 billion last year.

A study by the state-run Korea Institute for International Economic Policy said the pact could boost annual two-way trade by $3.3 billion in the near term and raise Korea`s GDP by 1.3 trillion won ($1.06 billion).

Korea`s main exports to India are auto parts, petroleum products, and mobile phones. Its largest import from India is naphtha, accounting for more than half of all imports in 2008.