Indian, Korean trade ministers talk yet to break ice on trade deficit, market access, CEPA

Sanjeev K Ahuja On Jan 11, 2022

NEW DELHI: The meeting between Indian Commerce minister Piyush Goyal and South Korean trade minister Han-koo Yeo in New Delhi on Tuesday, which was expected to discuss the key issues including large trade deficit, market access issues, and non-tariff barriers faced by Indian exporters, ended without any specific conclusion.

The joint communique issued on Tuesday evening, instead, plainly stated that both the Ministers held wide-ranging discussions covering the whole gamut of Bilateral Trade and Investment related aspects, and did not carry mention of the above issues.

It further stated that India and Korea agreed to impart fresh momentum to the discussions on CEPA up-gradation negotiations, and aimed to achieve the trade target of USD 50 Billion before 2030.

Han-Koo Yeo Minister for Trade represents the Ministry of Trade, Industry and Energy (MOTIE), Republic of Korea and Piyush Goyal is the Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles in India.

The ministers agreed to impart fresh momentum to the discussions on CEPA up-gradation negotiations and also promote extensive B2B interactions on trade and investment between the Industry leaders of the two countries, it added.

However, the statement did not find mention the issues such as large trade deficit, market access issues, and non-tariff barriers being faced by Indian exporters to penetrate the South Korean market.

It is very well known that the trade deficit between India and South Korea has been widening every year as Indian exports to Korea amount to about USD 5.07 billion while imports from Korea to India were about USD 15.03 billion by 2019-20, a deficit of about USD 10 billion.

But the statement issued on Monday by the Indian government had clearly said that the discussion could focus on addressing the large trade deficit, market access issues, and non-tariff barriers faced by Indian exporters besides investment-related issues.

On Tuesday, the issue of terms and scope of the Comprehensive Economic Partnership Agreement (CEPA), which both sides have been wanting to be revised came up prominently but nothing conclusive seemed to have come out during the discussions.

The joint statement said that the two Ministers agreed with the spirit of openness to address difficulties expressed by industry from both sides and instructed their respective negotiating teams to meet on a regular basis in order to conclude the CEPA up-gradation negotiations as soon as possible in a time-bound manner building upon support from relevant stakeholders, so as to try to achieve the target of USD 50 Billion before 2030 which was agreed at the summit meeting in 2018.

This regular negotiation shall be a forum to discuss the difficulties of the business community from both countries and emerging trade-related issues including supply chain resilience. The Ministers agreed to boost bilateral trade between India and Korea to achieve growth in a fair and balanced manner to the mutual advantage of both sides.

The visit of the Minister for Trade, Republic of Korea, Han-koo Yeo to India was scheduled to attend the Vibrant Gujarat Global Summit 2022, which got postponed due to increasing cases of Covid-19 in Gujarat. He was earlier supposed to meet the Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush Goyal during this summit in Gujarat.