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Trade News
KOREA AND CENTRAL
AMERICAN COUNTRIES
NEGOTIATE FTA
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Officials from Korea and the six
Central American countries of Costa
Rica, El Salvador, Guatemala, Honduras,
Nicaragua and Panama met in the Costa
Rican capital of San Jose, from Feb. 13
to 17, to process the Korea-Central
America Free Trade Agreement (FTA)
through legal scrubbing.
Legal review teams from both parties
participated in the meeting. The Korean
delegation was led by Director Kwon
Hyouk Woo of MOTIE’s FTA Negotiation
Cooperation Division, while Central
America sent deputy-level trade representatives
in charge of
- negotiations from each of the six countries.
Korea and the Central American countries
concluded negotiations for the FTA
last year on November 16, although in
the case of Guatemala, the agreement
excluded certain issues regarding market
accessibility and place of origin. Followup
measures are currently in progress for
the official signing, set to take place in
the first half of this year, including the
steps of legal review, initialing, and translations
of the agreement from the original
English into the national languages of
both parties.
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KOREA AND INDIA
HOLD TALKS TO
IMPROVING CEPA
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On Feb. 13-14, the second negotiations
for improving the Korea-India
Comprehensive Economic Partnership
Agreement (CEPA) took place in New
Delhi, India.
Led by Yoo Myung-hee, MOTIE's
Director-General for FTA Negotiations,
the Korean delegation consisted of representatives
from the Trade Ministry, the
Ministry of Strategy and Finance and the
Ministry of Agriculture, Food and Rural
Affairs. Sanjay Chadha, Joint Secretary
of the Indian Department of Commerce,
led the Indian delegation.
The first negotiations for improving
the Korea-India CEPA took place in
- October 2016 in Seoul, where the two countries discussed
their basic positions
on issues regarding products, place of
origin and services.
Building on what was discussed at the
first meeting, the upcoming event paved
the way for fruitful discussion, including
talks on how to improve product concessions
and product specific rules of origin
(PSR) and market accessibility.
The negotiation came at a meaningful
time, as the Korea-India CEPA will offer
a more diverse means to trade with India,
one of the largest and most promising
markets in the world.
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Government & Policy
KOREA TO INJECT
KRW 17 TRILLION IN
12 NEW INDUSTRIES
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Korea plans to invest KRW 17 trillion
(USD 15 billion) in 12 new industries,
including those involved in making electric
and autonomous vehicles, robots, and
drones, which are expected to form the
future backbone of the Korean economy.
The government expects that this will ultimately
lead to the creation of 30,000 jobs.
This initiative to find new backbone
industries that will sustain the
- country’s economic future will receive financial
backing from both private and public
funding. As such, the government aims
to improve regulations, provide focused
support, build convergence platforms and
create entry-level markets. MOTIE
expects the new initiative to put exports
back on track, and bring the number of
smart factories up to 5,000, along with
new jobs.
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AMENDED SPECIAL
TAXATION
RESTRICTION ACT IN
FULL SWING
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Upon announcement of the 2016
Proposed Amendments to the Tax Law
on July 28, 2016, the Special Taxation
Restriction Act was amended on
December 20, 2016, and enforced beginning
January 1, 2017. The amended Act
contains changes that make new growth
industries the focus of tax support to revitalize
the economy through various
means. This includes bringing stability to
the economic structure and creating quality
jobs.
The expiration date for the special taxation for foreign workers was
- extended,
while the earned income tax was raised
to 19 percent. In addition, qualifications
for seven-year tax exemptions for foreign
investors were revised from “industrysupporting
services and hightech businesses”
to “new growth engine industry
businesses that are based on a technology
prescribed by Presidential Decree”.
These industries include future cars,
intelligent information, next-generation
software and security, biomedicine, new
energy industries, robots and aviation.