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| President Moon Jae-in claps during the signing of the RCEP trade deal, at Cheong Wa Dae, Sunday. Japanese Prime Minister Yoshihide Suga, left in the screen, is seen during the virtual ceremony. Korea Times photo by Wang Tae-seok |
Country sandwiched between US, China over mega trade deals
By Do Je-hae
Some global mega trade deals involving or possibly involving Korea are expected to bring the country additional challenges.
The signing of the 15-member Regional Comprehensive Economic Partnership (RCEP) by Korea, China, Japan, Australia, New Zealand and the 10 ASEAN nations, Sunday, during a virtual meeting of signatories has raised questions about the possible emergence of a multilateral trade rivalry between the U.S. and China, particularly under a new U.S. administration.
With the launch of the RCEP, which is described by the international media as "China-led," speculation is rising that a Joe Biden White House could pursue the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an evolution of the Trans Pacific Partnership (TPP) that the U.S. promoted but then withdrew from under the current Donald Trump administration.
In 2017, the U.S. pulled out of the TPP, signed in 2016 under the Barack Obama administration by 12 countries ― Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the U.S. The remaining 11 countries renegotiated and signed the CPTPP in March 2018.
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As Obama's vice-president, U.S. President-elect Biden actively supported the TPP and has been critical of Trump's decision to withdraw from the massive trade deal.
Biden is largely expected to pursue the reentry of the U.S. into the CPTPP, particularly to counter China's rise with the signing of the RCEP, which is the world's largest trade agreement, covering one-third of the world's GDP and population.
If the U.S. seeks to enter the CPTPP, it is likely to urge its allies to join the group as well, and Korea, already a member of the RCEP, is likely to be pushed to join, being sandwiched again in the trade rivalry between the U.S. and China.
After the signing of the RCEP, Sunday, Cheong Wa Dae faced questions from the media about what the government will do if the U.S. requests Korea's participation in a multilateral trade deal with the U.S., such as the CPTTP.
A presidential office official said the RCEP and CPTTP were "not confrontational but complementary," adding Korea could enter the CPTTP "if necessary." "But now is not the time to decide," the official told reporters.
Analysts say Korea's participation in the CPTTP would bring benefits economically as well as diplomatically, particularly in relations with the U.S. and Japan. Korea has been urgently moving to mend relations with Japan under the new Yoshihide Suga administration ahead of the Tokyo Olympics, which Seoul sees as an opportunity for diplomacy for President Moon Jae-in's peninsula peace process.
"There is a definite upside to South Korea joining the CPTPP," Mason Richey, associate professor of international politics at Hankuk University of Foreign Studies in Seoul, told The Korea Times. "First, there are the economic advantages, including greater connections with Southeast Asia. There is also the political advantage of joining another deal with Japan, adding momentum to the recent RCEP deal, which also includes Japan. This is salutary for South Korea's relations with Japan and the U.S., critical partners in the Northeast Asia region. The strategic worry is how China would regard South Korean accession to the CPTPP, but that problem is manageable."
Leif-Eric Easley, an associate professor of international studies at Ewha Womans University in Seoul, also said that entering into a multilateral trade pact with the U.S. and Japan would be in Korea's interest.
"In pursuit of post-pandemic economic growth and improving standards for international trade, a Biden administration may seek to rejoin the Trans-Pacific Partnership with some negotiated updates concerning labor, the environment and public health safety. In that case, it would be in South Korea's interest to join a trade pact with higher standards than the RCEP. Since Japan is a gatekeeper of the CPTPP, this would be another reason for Seoul to patch up relations with Tokyo," Easley told The Korea Times.
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