Foreign Policy Watch: India-South Korea

Foreign Policy Watch: India-South Korea

India seeks Tariff Elimination on key items in CEPA Talks with South Korea

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Comprehensive Economic Partnership Agreement (CEPA)

Mains level: India's trade deficit

Why in the News?

  • India wants, South Korea to eliminate tariffs on items such as varieties of meat, milk, fruits, fish, stones, yarn, and petroleum products.
    • These items were previously exempted or protected against steep cuts in the India-Korea Comprehensive Economic Partnership Agreement (CEPA).

What is CEPA?

Details
Definition A CEPA is a broad trade agreement that encompasses trade in goods and services, investments, intellectual property rights, and economic cooperation.
Key Components
  • Trade in Goods: Reduction/elimination of tariffs and non-tariff barriers.
  • Trade in Services: Liberalization of service sectors.
  • Investment: Protection and promotion of investments.
  • Intellectual Property Rights (IPR): Strengthening protection of IPR.
  • Economic Cooperation: Collaboration on economic and technical aspects.
  • Dispute Resolution: Mechanisms for resolving disputes.
Objectives
  • Enhance bilateral trade.
  • Promote investment.
  • Foster economic integration.
  • Encourage innovation and economic growth.
Examples
  • India-Japan CEPA: Signed in 2011, focuses on tariff reduction, service trade liberalization, and investment promotion.
  • India-Mauritius CECPA: Effective from April 2021, includes provisions on trade in goods, services, and investment.
  • India-UAE CEPA: Entered into force on May 1, 2022
Significance for India
  • Economic Growth: Provides new markets for Indian goods and services.
  • Job Creation: Increased trade and investment can create jobs.
  • Technological Advancements: Access to new technologies and best practices.
  • Strategic Partnerships: Strengthens economic and strategic ties.
Challenges
  • Implementation Issues: Requires robust legal and institutional frameworks.
  • Domestic Industry Impact: Concerns about increased competition.
  • Regulatory Harmonization: Differences in regulatory standards can pose challenges.

India-South Korea CEPA: A quick recap

  • The India-South Korea CEPA was signed in August 2009 and implemented in January 2010.
  • It covers trade in goods, investments, services, and bilateral cooperation.
  • Tariff Concessions:
    • India offered tariff elimination or concessions on 83.8% of tariff lines from South Korea.
    • While South Korea offered concessions on 93.2% of tariff lines.

Upcoming Negotiations

  • Trade Deficit Focus: Narrowing the trade deficit with South Korea is high on India’s agenda.
  • Stakeholder Involvement: Indian industry stakeholders have been provided with a draft request list and asked to suggest more items for tariff cuts or propose deletions if needed.
  • Standards and Technical Barriers: The Department of Commerce has requested the industry to share issues related to SPS (Sanitary and Phytosanitary) and TBT (Technical Barriers to Trade) standards faced while exporting to South Korea.

Back2Basics:

Sanitary and Phytosanitary (SPS) Measures:

  • SPS measures are protocols implemented by countries to protect human, animal, and plant life from diseases, pests, and contaminants. 
  • These measures are primarily focused on ensuring the safety of food products and preventing the spread of diseases and pests across borders.
  • SPS measures must be based on scientific evidence and risk assessments to ensure they are appropriate and effective.
  • Examples: quarantine requirements for imported plants and animals, limits on pesticide residues in food, and import bans from regions affected by specific diseases.

Technical Barriers to Trade (TBT):

  • TBT are regulations and standards related to product safety, quality, and environmental impact.
  • They aim to protect human health and safety, animal and plant life, the environment, and to prevent deceptive practices.
  • These measures should not create unnecessary obstacles to international trade and must be transparent and non-discriminatory.
  • Examples: Labeling requirements for food products, safety standards for electrical appliances, and environmental regulations for vehicle emissions.

Major Issue: Trade Deficit Concerns

  • Trade Deficit Focus: Reducing the trade deficit with South Korea is a key discussion point for India.
    • Before CEPA (2007-09), India’s average exports to South Korea were $3.4 billion, with imports at $7.3 billion, leading to an average trade deficit of $4 billion.
  • Trade Statistics: In 2023-24, India’s imports from South Korea were $21.13 billion, while exports were only $6.41 billion.
  • Post-CEPA Data: After CEPA (2022-24), average exports increased to $7.1 billion, and imports surged to $19.9 billion, resulting in an average trade deficit of $12.8 billion.
  • GTRI Analysis: The Global Trade and Research Initiative (GTRI) report indicates a 220% increase in the trade deficit from the pre-CEPA period to the post-CEPA period.

PYQ:

[2015] The terms ‘Agreement on Agriculture’, ‘Agreement on the Application of Sanitary and Phytosanitary Measures’ and Peace Clause’ appear in the news frequently in the context of the affairs of the:

(a) Food and Agriculture Organization

(b) United Nations Framework Conference on Climate Change

(c) World Trade Organization

(d) United Nations Environment Programme

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Foreign Policy Watch: India-South Korea

India-South Korea Relations

Note4Students

From UPSC perspective, the following things are important :

Prelims level: CEPA

Mains level: Paper 2- India-South Korea ties

Context

  • During the past five years, India and South Korea have experienced considerable divergence in their respective national objectives.

Background

India–South Korea relations - Wikipedia

  • Bilateral relations between India and South Korea, officially known as the Republic of Korea, were established in 1962 and upgraded to Ambassador-level in 1973.
  • South Korea’s open market policies found resonance with India’s economic liberalization, and its ‘look east policy’ and ‘act east policy’.
  • The relations has become truly multidimensional, spurred by a significant convergence of interests, mutual goodwill and high level exchanges.
  • During PM Modi’s visit to ROK in May 2015, the sides elevated the ties to ‘Special Strategic Partnership’.
  • President Moon’s India visit marked the 45th anniversary of bilateral diplomatic ties.

Why India is important for South-Korea?

  • One of the points that the Koreans have been making to India is that they see India as a country that is now strategically important to them
  • South Korea also finds in India a very acceptable partner.
  • India doesn’t have edges which can create problems for them. They are aware of one factor which they have grown up with, which is the Pakistan factor.
  • With new issues cropping up in ties with China and America, export-driven South Korea must find new markets.
  • South Korea’s economic growth has slowed, presenting it with important challenges.
  • South Korea is targeting economies with the greatest growth potential like India.
  • South Korea is too heavily dependent on China’s market. So diversification is essential for South Korea..
  • Need cooperation for development in third countries, like capacity building programmes in Africa

India – South Korea Relations

  • Political:
    • In May 2015, the bilateral relationship was upgraded to ‘special strategic partnership’.
    • India has a major role to play in South Korea’s Southern Policy under which Korea is looking at expanding relations beyond its immediate region.
    • Similarly, South Korea is a major player in India’s Act East Policy under which India aims to promote economic cooperation, cultural ties and develop strategic relationships with countries in the Asia-Pacific.
  • Regional Stability:
    • The regional tensions in South Asia especially between India and China create a common interest for India and South Korea.
    • This could be a collaborative approach for regional stability.
  • Nuclear: 
    • South Korea’s key interest in managing their nuclear neighbour (North Korea) is similar to India’s considerations toward Pakistan.
    • The US alliance system, established with South Korea and Japan, puts pressure on North Korea to cap its nuclear programme.
    • Containing North Korea is beneficial to India’s economic and regional ambit in East Asia.
    • It also adds to its approach to the nuclear non-proliferation regime as a responsible nuclear state.
  • Economic:
    • The current bilateral trade between India and South Korea is at USD 21 billion and the target that has been set is USD 50 billion by the year 2030.
    • India and South Korea have signed the Comprehensive Economic Partnership Agreement (CEPA), 2010 which has facilitated the growth of trade relations.
    • To facilitate investment from Korea, India has launched a “Korea Plus”facilitation cell under ‘Invest India’ to guide, assist and handhold investors.
  • Diplomatic:
    • There is a long-lasting regional security dilemma with the continued verbal provocations and a conventional arms race.
    • Thus, despite the alliance system, Seoul appears to be searching for a stronger diplomatic stand on imminent regional issues beyond the alliance system.
    • South Korea’s approach to India comes with strategic optimism for expanding ties to ensure a convergence of interest in planning global and regional strategic frameworks.
  • Cultural:
    • Korean Buddhist Monk Hyecho or Hong Jiao visited India from 723 to 729 AD and wrote the travelogue “Pilgrimage to the five kingdoms of India” which gives a vivid account of Indian culture, politics & society.
    • Nobel Laureate Rabindranath Tagore had composed a short but evocative poem – ‘Lamp of the East’ – in 1929 about Korea’s glorious past and its promising bright future.

Challenges

  • Stagnation in Economic relationship:
    • The economic partnership is struck at $22 billion annually.
    • Also, the defence partnership appears to have receded from great all-round promise to the mere sale and purchase of weapon systems.
    • Trade between the two countries was sluggish and there was no major inflow of South Korean investment into India.
    • No upgrade in CEPA: India and South Korea were also trying to upgrade their Comprehensive Economic Partnership Agreement (CEPA) agreement, but to no avail.
  • Cultural Prejudices on both sides preventing people-to-people ties
    • Cold War Era perception: There may be a widespread perception among South Koreans of India as a third world country, rife with poverty and hunger.?
    • Indian Diaspora: Within South Korea, the integration of Indians in the local population is far from complete, with some instances of racial prejudice or discrimination toward Indians
    • Inadequate acknowledgment of Korean Culture: To a certain extent Indians are unable to distinguish between the cultural and social characteristics of South Koreans from that of Japanese/Chinese.
  • Unfulfilled potential of Cultural Centres
    • Indian Culture Centre (ICC) was established in Seoul 10 years ago?to promote people-to-people contacts.
    • However, ICC has to reach an exponentially wider audience and its focus has to expand beyond the urban, English-speaking elite of Seoul.
    • The same may be applicable to South Korean culture centres in India.
  •  Divergence in objectives
  • During the past five years, India and South Korea have experienced considerable divergence in their respective national objectives.
  • There was a clear drift by South Korea away from multilateral security initiatives led by the United States, such as the Quad (the U.S., Australia, India and Japan); meanwhile, India has been actively participating in them.

Change in Korean foreign and security policies and opportunities for India

  • The newly elected Korean President, Yoon Suk Yeol, has brought about a paradigm shift in South Korean foreign and security policies.
  • He has proposed that South Korea should step up to become a “global pivotal state, anchored in liberal values and a rules-based order”.
  • Opportunities for India: South Korea’s new willingness to become a global pivotal state and play an active role in regional affairs is bound to create multiple opportunities for a multi-dimensional India- Korea partnership.
  • South Korea’s strategic policy shift to correct its heavy tilt towards China is bound to bring new economic opportunities for both countries.
  • The trade target of $50 billion by 2030, which looked all but impossible a few months ago, now seems within reach.
  • Convergence of capabilities: The emerging strategic alignment is creating a new convergence of capabilities and closer synergy in new areas of economic cooperation such as public health, green growth, digital connectivity, and trade, among others.
  • With the strategic shift in South Korea’s defence orientation, new doors of cooperation for defence and security have emerged.
  • Defence cooperation: Advanced defence technologies and modern combat systems are the new domains for the next level of defence cooperation between the two countries.
  • A Roadmap for Defence Industries Cooperation between the Republic of India and the Republic of Korea (ROK) was signed in 2020.
  • Maritime security: South Korea’s participation in additional maritime security activities in the Indian Ocean, such as the annual Malabar and other exercises with Quad countries, will further strengthen India’s naval footprint in the Indo-Pacific region.
  • Defence policy coordination: The shift in South Korean policies will enable a strong India, South Korea and Japan defence policy coordination that could effectively forge new joint regional security policies.

Challenges

  • Chinese pressure: The Chinese leadership is adversely impacted by policy changes brought in by the Yoon administration.
  • The real challenge for global geopolitics is this: can South Korea withstand the inevitable Chinese pressure and stick to its new alignment?
  • Tension with North Korea: South Korea’s peace process with North Korea has completely collapsed.
  • In the coming days, as North Korea conducts more missile and nuclear tests, it may lead to regional tension.
  • Any breakout of hostilities on the Korean Peninsula can derail South Korea’s Indo-Pacific project.

Way forward

  • Strategic partnership: India has evolved excellent strategic partnerships with Japan, Vietnam and Australia.
  • South Korea could be the fourth pillar in India’s Indo-Pacific strategy along with Japan, Australia, and Vietnam.
  • This can bring about a paradigm shift in India’s position and influence in the region.
  • The time has come for the Indian and South Korean bilateral partnership to be strategically scaled up at the political, diplomatic and security domain levels.
  • With South Korea’s emergence as a leader in critical technologies, cybersecurity and cyber-capacity building, outer space and space situational awareness capabilities, South Korea can contribute immensely to enhance India’s foundational strengths in the Indo-Pacific.
  • India can help South Korea withstand Chinese pressure and North Korean threats.
  • This new partnership can have a long-term positive impact for both countries and the Indo-Pacific region.
  • It is an opportunity that neither country can afford to miss.

Conclusion

An independent, strong, and democratic South Korea can be a long-term partner with India, that will add significant value to India’s Indo-Pacific strategy.

 

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Foreign Policy Watch: India-South Korea

Deepening ties with South Korea

South Korea’s technological advancement and manufacturing capabilities can be helpful in India’s economic growth and human resource development. Seoul’s successful development story of the last few decades can complement Modi’s vision of making a “New India” by 2022.

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Foreign Policy Watch: India-South Korea

Why did North Korea blow up a joint liaison office with Seoul?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: DMZ, Armstice Agreement

Mains level: Read the attached story

North Korea blew up the joint liaison office with South Korea in Kaesong, an industrial township on its side of the border, becoming one of the most serious incidents to have occurred between the two countries, without them actually going to war.

Must read:

What is the Korean Armistice Agreement?

Practice question for mains:

Q. What is the Korean Armstice Agreement? Discuss the concept of the Demilitarized Zone (DMZ)?

What is this liaison office?

  • In 2003, North Korea and South Korea jointly set up a liaison office at Kaesong in North Korea.
  • It was set up in 2018 to facilitate communication between North Korea and South Korea.
  • The Kaesong Industrial Complex is a joint industrial zone where factories are operated and run by both North Koreans and South Koreans.
  • At its height, approximately 120 factories were operating in this industrial zone with more than 50,000 North Korean employees and several hundred managers.

Why did Pyongyang demolish it?

  • Since the past week, tensions between the two countries had increased after Pyongyang objected to activists and defectors in South Korea sending anti-North Korean propaganda leaflets, rice and Bibles using balloons.
  • Experts believe that these moves come after North Korea’s frustrations at South Korea’s inability to revive inter-Korean economic projects under pressure from the US, along with UN sanctions.

What’s next?

  • The demolition occurred just days after North Korean leader Kim Jong Un’s sister Kim Yo Jong had threatened to destroy the liaison office.
  • Following the demolition, North Korean said that it would be deploying troops in demilitarized areas, including in the Kaesong industrial zone.

Are they heading towards war?

  • Observers say that these actions by North Korea have been the most provocative in recent years.
  • Experts believe these provocations may have occurred because Pyongyang is hoping to pressure Seoul into giving it more concessions that would be economically beneficial for North Korea that has been hit hard by sanctions.
  • Experts believe these actions, however provocative, are not severe enough for Seoul to contemplate military aggression in retaliation.

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Foreign Policy Watch: India-South Korea

What is the Korean Armistice Agreement?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Korean Armstice Agreement

Mains level: Korean Armstice Agreement

A United Nations investigation into a recent exchange of gunfire between North Korea and South Korea inside the Demilitarized Zone (DMZ) has determined that both countries violated the armistice that ended the 1950-53 Korean War.

Practice question for mains:

Q. What is the Korean Armstice Agreement? Discuss the concept of the Demilitarized Zone (DMZ)?

The Korean Armstice Agreement

  • The Korean Armstice Agreement signed on 27 July 1953 is the armistice that brought about a complete cessation of hostilities of the Korean War.
  • It was not the end of a war, but only a cessation of hostilities in an attempt to negotiate a lasting peace.
  • Military commanders from China and North Korea signed the agreement on one side, with the US-led United Nations Command signing on behalf of the international community.

What is the Demilitarized Zone (DMZ)?

  • The DMZ marks where the 1950-53 Korean War — when China and North Korea battled UN forces led by the United States — ended with an armistice, not a treaty.
  • It is a 2 km-wide buffer, stretching coast to coast across the peninsula, lined by both sides with razor wire, heavy armaments and tank traps.
  • It is 60 km from Seoul and 210 km from the North Korean capital of Pyongyang. Inside the DMZ is a Joint Security Area (JSA).
  • The so-called ‘peace village’ of Panmunjom, where the armistice that halted the Korean War was signed in 1953, is located in the 800-metre-wide and 400-metre-long JSA zone.
  • A Military Demarcation Line (MDL) marks the boundary between the two Koreas.

Why it is significant?

  • Vast stretches of the DMZ have been no man’s land for more than 60 years, where wildlife has flourished undisturbed.
  • Last year, US President Donald Trump met with North Korean leader Kim Jong Un at the demilitarized zone separating the two Koreas, in Panmunjom.

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