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South Korea aims to conclude negotiations with India within 2022 to upgrade the bilateral Comprehensive Economic Partnership Agreement (CEPA) without going in for an early harvest package, South Korean trade minister Yeo Han-koo said on Wednesday.

South Korea and India have great potential to forge stronger partnerships for the post-pandemic era in key areas such as supply chains, emerging technologies, climate change, digital, vaccines, and public health cooperation, Yeo said in an interview a day after talks in New Delhi with Union commerce and industry minister Piyush Goyal.

Yeo and Goyal agreed to expand trade by upgrading the CEPA, which was finalized in 2009 and came into effect a year later, and by resolving industry-specific issues to achieve $50 billion in bilateral trade by 2030. Two-way trade crossed the $20-billion mark for three consecutive years since 2017 before being hit by the covid-19 crisis.

South Korea is eyeing the completion of negotiations for upgrading the CEPA within 2022, Yeo said. “I think CEPA unleashed great potential (but) despite all this potential, I think CEPA could be sort of the framework to build on and then expand. The CEPA took effect in 2010, which was forever ago, and now the world is completely changed," Yeo said.

“We need an upgrade to jumpstart our bilateral cooperation. We launched these upgrade negotiations in 2016, but I think the progress has been sort of on and off. I think what we agreed on between the two ministers is that we really need to renew this momentum and then bring new spirit into this process, so that in 2022 we could really conclude a more upgraded and better CEPA," he said.

India raised the issue of an early harvest package that was decided in 2018, but Yeo said there was “some misunderstanding on both sides" on this as the South Korean system does not allow such a package.

“We cleared that misunderstanding (on Tuesday). I think what I understand is that India took it as we agreed on the early harvest package and (it came) into effect right away and then the rest of the negotiations will continue. But what Korea thought we got into was, okay, this is an early harvest package that we agreed on and this is sort of a first stage, but (it has) not (taken) effect," he said.

“In our system, the ratification process in the National Assembly is quite stringent and intensive. We’ve never done (things) just partially... partially concluded (an) early harvest (package), and then ratified it in the National Assembly and then continued with the rest of it. We never did it. Our system does not allow that," he said.

The global trading environment is going through a big paradigm change, with the traditional scope of trade policy expanding to cope with issues such as supply chains, emerging technologies, and digital, Yeo said. “In this sense, Korea and India have great potential to forge stronger partnerships in this rapidly changing era, for example, in supply chains," he said.

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