South Korea awaits POSCO fate in India - Mr Kim Jong Hoon

Tuesday, 25 Jan 2011
Mr Kim Jong Hoon trade minister of South Korea, in an exclusive interview with Economic Times, said that India's comprehensive trade pact with South Korea signed in 2010 has shown encouraging results. Trade in goods is on track, but more has to be done in services. With a little effort from both sides, the benefits could multiply. Following is the Excerpts from an exclusive interview:
Q - Are you satisfied with the increase in trade after the signing of the bilateral comprehensive economic partnership agreement last year?
A - I think trade in goods is on track. There has been almost 45% increase in two-way trade last year. But there is no room for complacency. We want to upgrade the agreement, particularly in terms of tariff reduction scheduling. We want tariffs to come down faster.

Q - To what extent has CEPA liberalized market in services?
A - South Korea has agreed to open up certain professional jobs. One example is IT software. Programmers from India are now coming to look for well paying jobs. We never dreamt of such a thing before CEPA. Koreans now want to see what India is like and also look for business opportunities. Last year 18,000 Koreans visited India, half as tourists and half for business. In the same year, about 50,000 Indians visited Korea. Around 250 of them have been issued visas to look for professional jobs. We have to do more in services. Liberalizing movement of people is an important part of opening up services. People should be free to carry money as investments to other market or go to other market looking for new jobs. I and Mr Anand Sharma commerce and industry minister of India agreed to facilitate such movement of persons.

Q - Some items of interest to Korea, like automobiles, were kept out of the CEPA. Would you want them to be included gradually?
A - India does not allow import of finished cars. That is not a big problem as Korean companies have invested here. Hyundai is doing good business. In auto parts, India has agreed to a progressive tariff reduction. This will be good for our auto companies here who can import more parts, expand business and hire more people. Auto parts business in Korea is usually with small and medium companies who can easily attach themselves to new companies. So, smart SMEs in India can seek collaboration with Korean companies and specialize in making auto parts.

Q - Does the POSCO delay bother you?
A - We understand that India has its own concerns related to environment and mining rights. At the same time I have emphasized that it will get record high foreign investments through this project. Importantly, the investments are to build factories that can hire locals. I am very certain it will be good for the Indian economy. Many South Korean companies are looking at how the case is being dealt with.
(Sourced from www.economictimes.indiatimes.com)