'Mega FTA' CPTPP Accession, Passing the Ball to the Next Government... Social Discussion Instead of Accession Decision

Hong Nam-ki "Membership Decision Imminent" Statement Two Months Ago... "Will Gather Opinions"
Feeling Pressure to Push CPTPP Membership Ahead of March Presidential Election
Repeatedly Missed CPTPP Membership... US Seeks New Asian Economic Pact While Membership Timing Missed Again

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is attending the 1st External Economic Security Strategy Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 18th. In his opening remarks, Deputy Prime Minister Hong stated, "We plan to comprehensively coordinate the economic and strategic value of joining the CPTPP, review concerns such as damage to sensitive sectors, and discuss future responses and implementation schedules." Photo by Kim Hyun-min kimhyun81@

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government has officially begun the process of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However, instead of deciding to apply, it announced its intention to start social discussions for membership, leading to interpretations that the decision-making authority might be passed on to the next administration. The government's emphasis on social discussions on this day is closely related to the upcoming presidential election in March next year. Internally, the government has effectively concluded that joining the CPTPP is necessary, but concerns over the opening of agricultural and livestock products and Fukushima seafood have raised fears of opposition from farmers and fishermen. With the election imminent, pushing for CPTPP membership is burdensome. Following the ruling party's call for a slowdown, if opposition from farmers and fishermen intensifies, there is also a possibility that presidential candidates from both ruling and opposition parties might reverse CPTPP membership through their campaign pledges.

◆Government's Mega FTA Regional Tour Meeting＝According to the government on the 13th, the '1st Mega FTA Regional Tour Meeting' will be held at BEXCO in Busan on the 16th. The Ministry of Economy and Finance held the Foreign Economic Ministers' Meeting on the same day and expressed its intention to officially begin social discussions for CPTPP membership, marking the start of the first discussions this week.

Initially, the government planned to submit the CPTPP membership application by January next year at the latest. Although there was already an intention to join the CPTPP, the government had been moving cautiously. However, after Taiwan and China officially expressed their intention to join the CPTPP, a sense of urgency emerged that Korea should no longer delay participation in the Asia-Pacific region's 'mega FTA.' Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki announced at the Foreign Economic Ministers' Meeting on October 25 that a decision on CPTPP membership would be made. In particular, the timing for submitting the application was decided considering that the CPTPP chairmanship would change from Japan, with which Korea's diplomatic relations have deteriorated, to Singapore in January next year.

The dominant analysis is that the government's move to slow down after Taiwan and China's declaration of CPTPP membership intentions is due to the presidential election in March next year. The government's decision on CPTPP membership has been postponed repeatedly, and even after Deputy Prime Minister Hong's statement about an imminent decision, more than two months have passed, and the government is still in the stage of gathering opinions rather than making a decision.

Trade experts say, "The ambiguous expression of starting social discussions suggests that the government is unlikely to take the lead in persuading stakeholders of the necessity of CPTPP membership and actively pushing it forward," adding, "If public opinion worsens in the future, there remains a possibility that presidential candidates might withdraw CPTPP membership through their pledges, so the possibility of CPTPP membership failing again due to political logic cannot be ruled out."

[Image source=Yonhap News]

◆Wasting Time Watching China, US Proposes New Asia-Pacific Economic Cooperation＝There are speculations inside and outside the government that the current administration may not complete CPTPP membership. There are also many criticisms that the government has been passive about joining the CPTPP while watching China's stance. The current administration actively considered joining the CPTPP, which opened up after the US withdrawal, at the beginning of its term. However, discussions on CPTPP membership sank again after the rapid deterioration of Korea-Japan relations due to Japan's export restrictions in 2018. Moreover, since the CPTPP, formerly the Trans-Pacific Partnership (TPP), was a US-led system, the Korean government has taken a strategic ambiguity stance between the US and China, watching China's position. Due to this diplomatic failure and lack of trade strategy, the government hesitated to join the CPTPP. After Taiwan and China applied for membership, the government hurried to push for CPTPP membership, but internal variables related to the end of the administration have made CPTPP membership uncertain.

There are considerable concerns about the uncertainty of joining the CPTPP, which still accounts for 15% of global trade and has high standards of norms. Especially after COVID-19, the global trade order has shifted from 'free trade → protectionism' and 'multilateralism → bloc formation,' making it urgent to secure a safety net through as many FTAs as possible.

Some criticize that the timing for joining was missed. US Secretary of Commerce Gina Raimondo recently announced plans to seek new economic agreements with Asian countries. This follows earlier efforts to establish a new economic framework in the Indo-Pacific region, signaling another attempt to build new economic cooperation. Critics say the government has been late, hesitating for years to join the CPTPP, and now, as the US increases its pressure on China and China declares its intention to join the CPTPP, the government is hastily accelerating its CPTPP membership efforts, essentially playing catch-up.

Professor Jeong In-gyo of Inha University's Department of International Trade said, "While the positive effects of joining the CPTPP are significant, attention should be paid to the fact that the US is seeking a new economic cooperation system in Asia and the Indo-Pacific region," advising, "We should actively cooperate in building a US-centered new economic order."