Value context and insight. lkm@koreatimes.co.kr
Korea joining CPTPP tall task for Yoon administration
A group of farmers and fishermen hold a rally protesting the government's move to apply for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at the Gwanghwamun Government Complex in Seoul, April 8. Korea Times file
By Lee Kyung-min
Deputy Prime Minister and Finance Minister Hong Nam-ki attends a meeting at the Gwanghwamun Government Complex in Seoul, April 8. Korea Times file
Membership application due this month, negotiations may take years
By Lee Kyung-min
Joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will be a tall task for the incoming Yoon Suk-yeol administration, as it will require effective leadership and communication skills to coordinate the diverse range of interests ― from those of export firms to those of agricultural workers ― according to market watchers, Monday.
Whether and how well the business-friendly Yoon administration wins the support of farmers and fishermen in fear of the permanent loss of their livelihoods will define the success of its economic policy directives under the president-elect, whose top advisers are trade and business experts with strong convictions about market-driven growth.
The outgoing Moon Jae-in administration has not broached the politically divisive issue over the past few years, mindful of voters in rural regions, where Korea becoming a member of the mega trade deal involving 11 member countries could mean the outright abandonment of traditional farming and fishing industries, already long sidelined to prioritize the country's rapid export-oriented growth of the last 60 years. The 11 member countries of the CPTPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The Moon administration was criticized by some for the swift ratification of the less invasive trade agreement, the Regional Comprehensive Economic Partnership (RCEP), which includes 15 member countries ― the 10 members of the Association of Southeast Asian Nations (ASEAN) as well as Korea, China, Japan, Australia and New Zealand. Some viewed that the ratification was due to diplomatic pressure from China, while others saw it as an attempt to diversify Korea's export market so it can become be less dependent on China.
Deputy Prime Minister and Finance Minister Hong Nam-ki said on April 15 that the key economy-related ministries have reached an agreement to apply for CPTPP membership. The application will be submitted before the end of the month following a National Assembly briefing. Up to two years will be needed for the application to be reviewed and membership granted.
Agriculture, fishing industries overshadowed
The trade deal by definition comes at the expense of farmers and fishermen -- workers in industries that lack the technological means to overpower global peers unlike the high-tech and manufacturing industries anchored by large conglomerates, according to Moon Jong-chol, a research fellow at the Korea Institute for Industrial Economics and Trade (KIET).
“It is a sad ― but undeniably true ― reality of a globalized economy,” he said. “The CPTPP is widely considered as a critical step to bolstering the global standing of the country's export-reliant economy, a rare growth opportunity to survive in the fierce global market.”
Data from the state think tank showed that the combined GDP of the 11 CPTPP member countries accounted for 12.8 percent of the global GDP in 2019. The member countries accounted for 23.2 percent of Korea's exports and 24.8 percent of its imports.
The Korea Institute for International Economic Policy (KIEP) said that the mega trade deal membership will help Korea increase its annual GDP growth by 0.33 to 0.35 percentage point, with about 3.6 trillion won ($2.9 billion) in benefits for Korean consumers.
The trade ministry said the move marks a development in government efforts over the past eight years, and a step toward establishing a stable global supply chain in the Asia-Pacific region.
“The government plans to apply for the membership this month, but joining the CPTPP and the agreement taking effect will take time,” a trade ministry official said. “We will continue with the process, while maintaining open communication channels with farmers and fishermen, taking them into consideration.”