hankyoreh

South Korean President Moon Jae-in gives a celebratory address to commemorate Korea’s Trade Day at COEX in Seoul on Dec. 8. (Blue House photo pool)

South Korea is looking more seriously at the possibility of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a sprawling free trade agreement (FTA) for the Asia-Pacific region. The renewed interest was prompted by the signing of the Regional Comprehensive Economic Partnership (RCEP) on Nov. 15 and the election of Joe Biden as US president.

Analysts think that Seoul may be moving toward making CPTPP membership its official trade policy. Such a move would be motivated by several factors, including the fact that the RCEP, signed by South Korea, China, Japan and the 10 members of the Association of Southeast Asian Nations (ASEAN), functions as a de facto Korea-Japan FTA. In addition, Seoul believes that, in order to gain the upper hand in negotiations about tariff concessions and liberalization of the domestic market with the pact’s current 11 members, it will have to join the CPTPP before the Biden administration decides to return to the table.

One notable move linked to this was Trade Minister Yoo Myung-hee’s visit to the US on Dec. 8. While in the US, Yoo met separately with US Trade Representative Robert Lighthizer and with Katherine Tai, chief trade lawyer for the US House Committee on Ways and Means and Biden’s nominee to be the next US trade representative. During those meetings, Korean and American officials reportedly discussed respective strategies and policy directions in regard to potential membership in the CPTTP.

Moon said that his administration would “continue reviewing membership in the CPTPP” during a ceremony on the Day of Trade, on Dec. 14.

“For the past few years, the South Korean government has held to the position that it is still reviewing membership [in the CPTTP]. The president’s remarks are consistent with that,” a trade official told the Hankyoreh over the telephone on the same day.

What about the variable of the US rejoining the CPTPP? “The US remains a key market in the CPTTP region. We will continue to review this while keeping a close eye on the new US administration’s development of its approach to trade policy,” the official said.

“Complicated calculations need to be done about whether we ought to join the CPTPP before the US’ return,” the official added.

The Trump administration announced it was withdrawing from the TPP, the predecessor of the CPTPP, in January 2017.

One interesting development is that the leaders and trade ministers of South Korea, China, Japan and the UK have been bringing up CPTPP participation at official events following Biden’s election and the RCEP signing.

Chinese President Xi Jinping said on Nov. 20 that China is “actively considering participation” in the CPTPP. And shortly after the RCEP signing, Liz Truss, the UK’s Secretary of State for International Trade, hinted that the UK might also sign up. Joining the CPTPP would be extremely important for the British economy, Truss said, since it would allow British companies to deepen its involvement in the regional market.

“We look forward to the creation of a free trade zone in the Asia-Pacific region through the early signing of the RCEP, the current members’ continuing implementation of tariff reductions, and the expansion of member states,” said Japanese Prime Minister Yoshihide Suga, who plays a leading role in the CPTPP, on Nov. 20.

Japan, which will be the CPTPP’s chair country next year, is expected to push aggressively to bring not only South Korea and the US but also China into the pact.

Some analysts think that the Biden administration’s decision to return to the CPTPP could be accelerated if major countries such as South Korea, China and the UK indicate that they may join.

“We expect the US will take the lead of a CPTPP expansion or promote a TPP of its own given Biden’s emphasis on strengthening a coalition of American allies and on restoring the system of international cooperation. It’s possible that the US will ask South Korea, as a traditional ally, to participate,” the Korea Institute for International Economic Policy said.

However, Biden has avoided making any definite remarks about rejoining the CPTPP, remarking that he intends to focus on domestic issues for now.

The CPTPP, which covers the entire trans-Pacific region, involves a much higher degree of market openness and liberalization than the RCEP, whose members are South Korea, China, Japan, and the 10 members of ASEAN. Tariff concessions, either immediate or gradual, cover 95-100% of products, and new entrants to the agreement are required to provide the highest level of market openness, unlike the current 11 members.

If South Korea moves quickly to join the CPTPP while the Biden administration keeps postponing the US’ return, Korea could gain an advantage in the membership negotiations, potentially reducing the scope of market liberalization or delaying its time frame.

One of the reasons for South Korea’s hesitation to join the CPTPP was the idea that it would be equivalent to signing an FTA with Japan, with which Korea has a chronic trade deficit. But South Korea and Japan’s joint membership in the recently signed RCEP makes that a moot point, prompting a shift in opinion toward preemptively joining the CPTPP rather than postponing that move.

By Cho Kye-wan, staff reporter

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