Finance minister announces S. Korea is officially starting process of joining CPTPP

Posted on : 2021-12-14 17:37 KST Modified on : 2021-12-14 17:39 KST
The announcement has prompted criticism from the country’s agricultural sector
Hong Nam-ki, deputy prime minister and minister of economy and finance. (provided by the Ministry of Economy and Finance)
Hong Nam-ki, deputy prime minister and minister of economy and finance. (provided by the Ministry of Economy and Finance)

The South Korean government has announced plans for its full-fledged pursuit of membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Having previously weighed the necessity of joining and completed preparatory steps, the government has now declared that it will officially begin procedures toward joining the pact.

The announcement was made by Minister of Economy and Finance Hong Nam-ki while presiding over a meeting of international economy-related Cabinet ministers on Monday.

Hong explained that the government plans to begin canvassing public opinion and begin a social discussion toward joining the agreement.

“We will be initiating the relevant procedures based on social discussions with various stakeholders and others,” he added.

In its examination of possible CPTPP membership, the government had previously been working to revise related domestic institutions, including those related to subsidies on seafood products, digital trade, state enterprises, and sanitary and phytosanitary measures.

“With the recent active changes afoot in the Asian economic order — including Taiwan’s application to join the agreement and the world’s largest mega-FTA going into effect [in early 2022] — we cannot continue any longer confining our discussions on membership to the level of government agencies,” Hong noted.

“In consideration of the full range of factors, including the economic and strategic value of expanded trade and investment and our standing as a state practicing open trade, we will be pursuing membership in the agreement in earnest,” he said.

He also announced plans to make “careful preparations” to resume FTA negotiations with other major countries, including Mexico and the members of the Gulf Cooperation Council, a group consisting of six countries on the Arabian Peninsula.

The current situation involving FTAs is a highly complex calculus centering on the US and China.

The CPTPP went into effect in December 2018 with 11 countries as members, including Japan, Australia and Canada. The framework was first pursued under US and Japanese leadership in the form of the Trans-Pacific Partnership (TPP), as part of a strategy for “hemming China in” during the administration of US President Barack Obama.

But the US bowed out with the inauguration of “America First” advocate Donald Trump, leaving the framework spearheaded by Japan alone.

China responded by pursuing the Regional Comprehensive Economic Partnership (RCEP), a framework whose participants include South Korea, Japan, Australia, New Zealand, and the 10 members of the Association of Southeast Asian Nations. That partnership is poised to go into effect in January 2022.

The situation became even more complex when China declared in October that it also planned to join the CPTPP. The US countered in November by announcing plans to launch an Indo-Pacific economic framework next year to avoid losing ground to Beijing.Its key agendas concerned supply chains, the digital economy and climate change.

Under the circumstances, South Korea’s membership in the CPTPP became increasingly unavoidable.

“In some respects, [South Korea’s] CPTPP membership has become an inevitability, both in terms of economic issues such as global supply chains as well as in a diplomatic and security sense,” explained Song Yeong-kwan, a senior research fellow at the Korea Development Institute.

“In the case of products made by South Korean companies in Southeast Asia, they can enjoy tariff benefits if they use components made in Japan, but they could lose out if they use South Korean [components]. That’s why we need to join,” he said.

He went on to stress the importance of “maintaining a close relationship with the US in terms of foreign affairs and national security.”

“Not only is this not a matter of South Korea ‘choosing between’ the US and China, but we also have other agreements in progress, and we need to leave multiple possibilities open,” he said.

But with the CPTPP’s high levels of openness in commodity trade, South Korea’s membership would spell trouble for its agricultural sector. The agreement’s level of openness is even higher than for other free trade agreements.

“Free trade in agricultural products has benefited only agribusiness, and it has been devastating to agriculture and farmers in every country,” the National Federation of Farmers’ Associations said.

The federation called for a “stop to actions in pursuit of membership in the CPTPP,” which they say are taking place “without any measures to minimize damage to agriculture and farmers.”

By Lee Jeong-hun, staff reporter

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