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New Delhi, Seoul to conclude economic agreement by 2007

Amit Baruah

Trend towards pan-Asian framework for cooperation heartening: Kalam

SEOUL: New Delhi and Seoul took a major step towards advancing bilateral economic relations by agreeing to conclude a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2007 on the occasion of the first-ever visit by an Indian Head of State to South Korea.

A joint Ministerial statement committing the two countries to reach what will be India's first-ever CEPA with a member of the Organisation of Economic Cooperation and Development (OECD) was signed in the presence of Presidents A.P.J. Abdul Kalam and Roh Moon-hyun on Tuesday.

Growing interest

Currently, the India-South Korea trade stands at about $7 billion, but there is growing interest here in improving the economic relationship. Seven Ministers and 40 delegations from India have visited South Korea in the last four months.

Senior officials told presspersons that the India-Korea CEPA would cover trade in goods and services, measures for trade facilitation, promotion and liberalisation of economic flows, among other issues.

The two sides agreed to set up a joint task force at the level of officials to negotiate the terms of the CEPA after a joint study group (JSG) presented its findings on taking forward the bilateral economic relationship to the two Presidents on Tuesday. From the South Korean side, 66 persons were tasked to negotiate the CEPA.

The JSG report, for instance, feels that India and South Korea could consider establishing an "institutional mechanism" to promote joint efforts in sourcing energy supplies, including petroleum and natural gas, as well as commercial exploitation of other energy resources in third countries.

It also recommended that both sides, in accordance with their respective laws, but without regard to citizenship, residence or employment on a permanent basis, should simplify visa procedures to facilitate travel of both professionals and businesspersons.

Addressing the chambers of commerce, Mr. Kalam said that as regional trading arrangements become important building blocks of multilateralism in an increasingly globalised world, it was heartening to see that the trend towards a pan-Asian framework for cooperation is becoming increasingly more pronounced.

`Unprecedented scale'

"The recently concluded East Asia Summit has laid the foundations for a cooperative architecture in Asia on an unprecedented scale and we hope [it] will potentially launch the process towards the possible creation of an East Asian Community. We feel confident that in the next few years, we may see the rise of a Pan-Asian Free Trade Area covering all major Asian economies, including India, Korea, China, Japan, ASEAN and possibly extending to Australia and New Zealand," Mr. Kalam said.

This, he said, could be the third pole of the world economy after the European Union and the North Atlantic Free Trade Area and will open up new growth avenues for Asian economies. "We believe that our economic partnership with Korea would significantly contribute to eventual emergence of such an economic community in Asia."

Pointing out that the Korean steel giant, POSCO, had begun implementing a $12 billion integrated steel project in Orissa, the largest single inward foreign direct investment for India, and outwards for South Korea, Mr. Kalam said bilateral trade had more than tripled over the last 10 years.

"I would like to see that it [bilateral trade] grows to $ 20 billion on or before 2010," he added. Three other agreements — two in the field of science and technology and a third on cooperation and mutual assistance in customs matters — were also signed on Tuesday.

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