Talks between India and Korea for a Comprehensive Economic Cooperation Agreement (CECA) have entered the last mile with the pact expected to be signed by July-end. One important issue in services trade ? allowing Indian education and health professionals to work in Korea ? remains to be resolved and are expected to be finalised in talks scheduled from May 29 to June 2 in Seoul .
The meeting in Seoul will be the 10th and penultimate round of the CECA talks during which New Delhi would push for permission for its English teachers, doctors and nurses to work and/or set up shop in Korea, a senior official said. Korea has already agreed to India ?s request for opening up its services market to professionals from software, engineering, financial services and telecommunication sectors.
However, Koreans are quite conservative regarding opening up of their education and health sectors, sources said. ?Apart from some minor issues in services, most of the points on trade in goods and investment have been sorted out. We are entering the final leg of talks and by July-end or the first week of August we should be able to sign the CECA,? an official said.
India Inc had earlier asked the government to press for more market access for Indian service providers and professionals in the services market of Korea that is well developed and accounts for 52% of its GDP. The final agreement may also contain mutual recognition agreements in professional services to facilitate the entry of Indian professionals. According Ficci , Korea ?s services imports was worth over $85 billion in 2007. However, India occupies only a marginal share of this. The bulk of Korea ?s total services imports come from USA (around 25% share), EU (15% share), Japan (15%) and China (13%).
?Korea had improved upon its WTO commitments in major service sectors, for its FTA negotiations with USA . In the Asean-Korea FTA too, Korea?s offer in services goes beyond its WTO obligations and is better than its offer under the Doha Round. Therefore, Indian industry is also keen to secure concessions and market access for our service-providers ? more than Korea?s present level of WTO commitments. In the absence of any deep commitment in services, the agreement will not add much value to India ,? Ficci senior director Manab Majumdar said.
Transportation and travel-related services account for 60.5% of the total services imports of Korea. Business services and communication services also form a major portion. With Korea ?s market for IT services projected to reach $11.4 billion in 2008, market access in IT and IT-enabled services would also be crucial for India. Audio-visual, architecture and accountancy are other services of importance to India.
The countries will also exchange their respective final lists on investment and trade in goods. Of the total of around 5,000 tariff lines, India has kept 700-plus in the exclusion list. The main items include auto and auto components, agriculture, fisheries, wines, edible oils, textiles including nylon and polyester as well as items produced by micro, small and medium enterprises like perfumes, soaps and toiletries. An inter-ministerial meeting held here last week gave its green signal to the fourth and final version of the exclusion list, they said.
Earlier this year, commerce and industry minister Kamal Nath had responded to a suggestion by heavy industry minister Santosh Mohan Dev saying the commerce ministry would be very cautious on protecting interests of auto sector and would not offer any concessions to trading partners, including Korea in the auto sector in FTAs.
Unlike in free trade agreements with Asean or some other countries, the concerns on trade in goods are much lesser here as Korea has been less stringent about India ?s sensitive list. Sources said Korea has given relatively more leeway to India in drawing up the list of items in the exclusion list. The two countries have also agreed to include in the CECA bilateral cooperation pacts in energy, broadcasting, telecom, IT, non-conventional energy, science and technology, tourism, small and medium enterprises, infrastructure, transportation, audio-visual services, pharmaceuticals, healthcare and tourism.
The CECA would also have competition clauses to prevent international cartels from operating in both countries, and to punish such wrongdoers.