Comprehensive Economic Partnership Agreement
The Comprehensive Economic Partnership Agreement (CEPA) is a free trade agreement between India and South Korea. The agreement was signed on August 7, 2009. The signing ceremony took place in Seoul and the agreement was signed by Indian Commerce Minister Anand Sharma and South Korean Commerce Minister Kim Jong-Hoon. The negotiations took three-and-a-half years, with the first session in February 2006. The agreement still needs to pass the South Korean parliament. It passed the Indian parliament. Once passed, the agreement will come into effect sixty days later. The South Korean government expects the agreement to pass in the fall of 2009. The agreement, once passed, will cut South Korean tariffs on 93% of goods from India. India will cut 75% of total tariffs.
The unusual name for the agreement was suggested by India. It is equivalent to a free trade agreement. The agreement will provide better access for the Indian service industry in South Korea.. Services include Information technology, engineering, finance, and the legal field. South Korean car manufactures will see large tariffs cuts to below 1%.
The agreement will ease restrictions on foreign direct investments. Companies can own up to 65% of a company in the other country. Both countries avoided issues over agriculture, fisheries, and mining and choose not to decrease tariffs in those areas. This was due to the very sensitive nature of these sections in the respective countries. Trade between India and South Korea was $15.6 billion in 2008. This is a major increase from 2002, which had a total trade amount of $2.6 billion. The Korea Institute for International Economic Policy believes the agreement will increase trade between the two countries by $3.3 billion. The act came into force on January 1, 2010.
- Gwang-lip, Moon; Lee Sang-ryeul (2009-07-31). "India to sign trade deal next week". JoongAng Daily. Retrieved 2009-08-15.
- Olsen, Kelly (2009-08-07). "South Korea, India sign free trade agreement". Associated Press. Retrieved 2009-08-21.
- Koo, Heejin (2009-08-07). "South Korea, India Agree to Cut Tariff to Boost Trade". Bloomberg News. Retrieved 2009-08-21.
- "Indian professionals to get easy short-term visas from Korea". Economic Times. 2009-08-19. Retrieved 2009-08-21.
- "India, Korea agree to cut tariffs to boost trade ties". Hindu Business Line. 2009-08-07. Retrieved 2009-08-21.
- Haejung, Na (2009-08-07). "S. Korea, India sign bilateral trade agreement". Xinhua. Retrieved 2009-08-21.