"CPTPP Membership, Opportunity to Strengthen Asia-Pacific Bloc Economic Cooperation"

After Joining Application to China, Government Decision Imminent
Trade Experts Advise "Opportunity to Participate in New Trade Order... Avoid Provoking Japan, Urgent Need to Improve Relations"

[Sejong=Asia Economy Reporter Kwon Haeyoung] "The World Trade Organization (WTO) is showing signs of decline, and due to the US-China conflict, the global trade order may shift to a bilateral relationship. In a situation where it is necessary to conclude as many Free Trade Agreements (FTAs) as possible, joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has great significance as a proactive measure to prepare for changes in the global trade order."

Trade experts unanimously agreed that as the government approaches a decision on CPTPP membership, it will be an opportunity to strengthen economic cooperation in East Asia and the Asia-Pacific bloc and participate in establishing a new trade order. However, some cautious opinions were raised that bringing up the CPTPP membership card amid strained Korea-Japan relations could rather provoke Japan. The government plans to finalize the CPTPP membership issue at the early next month’s Ministerial Meeting on External Economic Affairs.

Professor Jeong In-gyo of Inha University’s Department of International Trade said, "With the WTO becoming hollowed out, the global multilateral trade system can no longer remain robust," adding, "In the trend toward a bilateral trade system, it is advantageous to conclude as many large-scale FTAs as possible."

Although the scale of the CPTPP has shrunk compared to before due to the US withdrawal from the TPP, it still accounts for 15% of global trade. The combined regional GDP of the 11 CPTPP member countries amounts to $11.2 trillion, which is 12.8% of the world GDP, and their trade volume reaches $5.7 trillion, or 15.2% of global trade.

Professor Jeong said, "Joining the CPTPP has the effect of concluding new FTAs with Japan and Mexico, the two countries among the 11 members with which Korea has not yet signed FTAs," adding, "Although Korea has concluded the Regional Comprehensive Economic Partnership (RCEP) with Japan, CPTPP has higher standards of norms, allowing for further market opening." It is analyzed that while Japan has allowed 83% market opening by item count through RCEP, additional market opening is likely after joining the CPTPP.

Kang Moon-sung, president of the Korean International Trade Association and professor at Korea University’s School of International Studies, evaluated, "The trade patterns after the Fourth Industrial Revolution, the US-China trade dispute, and the COVID-19 pandemic are shifting from a global to a regional focus," adding, "Because trade is increasing in specific regions, regional economic cooperation systems like the CPTPP and mega FTAs based on specific regions are becoming more important."

It is also analyzed that China’s application to join the CPTPP has created a favorable environment for Korea. Kang said, "With China and Taiwan applying for membership, a large economic cooperation system and new norms are being established in the East Asia region, so Korea should also participate in establishing the new order," adding, "The predecessor TPP was launched to contain China, which was a burden for us, but with the US withdrawal and China’s application, the burden regarding CPTPP membership has now disappeared."

However, it is evaluated that normalization of Korea-Japan relations is urgent for further progress in CPTPP membership. Kang advised, "If even one CPTPP member country expresses opposition, Korea’s membership is impossible," adding, "Even if Japan steps down from the CPTPP chairmanship next year, not much will change, so the current government should actively improve relations with Japan to reduce the burden on the next administration." Professor Jeong pointed out, "Talking about CPTPP membership without any normal dialogue between Korea and Japan only provokes Japan," adding, "Since the government has the will to join the CPTPP, it should approach the matter strictly based on national interest rather than political or diplomatic calculations."

Meanwhile, opinions were divided on the significance of China’s CPTPP membership application. A trade expert said, "We must join the CPTPP before China to negotiate favorable conditions when China eventually joins," adding, "The later we express our intention to join, the greater the disadvantage for us." Professor Jeong viewed, "China’s CPTPP application is largely a domestic move amid its conflict with the US," adding, "Japan opposes China’s CPTPP membership based on the US-Japan alliance, and Canada and Mexico, members of the United States-Mexico-Canada Agreement (USMCA), are also likely to express negative opinions about China’s membership."