CPTPP Losing Momentum... Membership Application Uncertain in the Second Half

Government Temporarily Holds Off on CPTPP Report to National Assembly... Membership Application Also Undecided
Massive FTA of 11 Asia-Pacific Countries... Accounts for 15% of Global Trade
Agricultural and Fishery Tariff Elimination Rate Reaches 96%... Strong Opposition from Farming and Fishing Sectors
Trade Chief Says "Problems Arise if Social Unrest Occurs... Now Is a Dangerous Time"

'CPTPP Membership Opposition!'
(Seoul=Yonhap News) Reporter Kim In-cheol = On the 12th, participants including farmers and fishermen shouted slogans at the nationwide rally to block the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) membership held in front of Seoul Station. 2022.7.12
yatoya@yna.co.kr
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＜Copyright(c) Yonhap News Agency, unauthorized reproduction and redistribution prohibited＞

[Asia Economy Sejong=Reporter Lee Jun-hyung] The government is struggling to accelerate its accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a national agenda. This is due to stronger-than-expected opposition from the agriculture and fisheries sectors, as well as President Yoon Seok-yeol's approval rating remaining in the 30% range during the early part of his term. There is also an assessment that CPTPP accession has effectively lost momentum, overshadowed by major trade issues such as the Indo-Pacific Economic Framework (IPEF) and Chip 4.

According to related ministries on the 29th, the Ministry of Trade, Industry and Energy is withholding plans to report the CPTPP accession promotion plan to the National Assembly. Reporting to the parliamentary standing committee is the final procedure required for the CPTPP accession application. The ministry stated that it has not set a specific deadline for submitting the CPTPP accession application. A ministry official said, "Except for the report to the National Assembly, all preparations for the CPTPP accession application are complete," adding, "(However) deciding when to submit the application is a complex issue."

The CPTPP is a mega free trade agreement (FTA) formed by 11 countries in the Asia-Pacific region, including Japan and Australia. Trade among CPTPP member countries accounts for about 15% of global trade volume. The government initially planned to apply for CPTPP accession in April. However, the schedule for reporting to the National Assembly was delayed due to the unexpected variable of 'complete removal of prosecution investigation rights (Geom-su-wan-bak),' which also postponed the CPTPP accession application.

The problem is that opposition from the agriculture and fisheries sectors intensified over the CPTPP's tariff elimination rate during this period. The CPTPP's tariff elimination rate for agricultural and marine products is 96.1%, which is close to full liberalization. The Korea Rural Economic Institute (KREI) predicted that joining the CPTPP would reduce agricultural, livestock, and fishery production by up to 440 billion KRW annually over 15 years. In response, 101 organizations from the agriculture and fisheries sectors held a large-scale rally opposing CPTPP accession on the 12th of this month in Yongsan, Seoul.

President Yoon's approval rating is also analyzed to have influenced the delay in the CPTPP accession application. His approval rating for state affairs has recently remained in the 30% range. Given the low presidential approval rating from the early days of the administration, the Ministry of Trade, Industry and Energy inevitably finds the CPTPP accession application, which could escalate social controversy, burdensome.

Within the ministry, CPTPP has also been deprioritized. While the government postponed the CPTPP accession application considering opposition from the agriculture and fisheries sectors, major trade issues such as IPEF and Chip 4 have followed in succession. Another ministry official said, "Recently, we have been focusing on issues like IPEF rather than CPTPP," adding, "(Regarding CPTPP accession) there is somewhat of a mood that momentum has been lost."

Andeok Geun, Director General Attending the Indo-Pacific Economic Framework Ministerial Meeting
(Seoul=Yonhap News) Andeok Geun, Director General of Trade Negotiations at the Ministry of Trade, Industry and Energy, is speaking at the 'Indo-Pacific Economic Framework (IPEF) Ministerial Meeting' held via video conference on the 26th at the Korea Chamber of Commerce and Industry video conference room in Jung-gu, Seoul. The meeting was co-hosted by Katherine Tai, U.S. Trade Representative (USTR), and Gina Raimondo, U.S. Secretary of Commerce. 2022.7.27 [Provided by the Ministry of Trade, Industry and Energy. Redistribution and DB prohibited]
Photo by yna.co.kr
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＜Copyright(c) Yonhap News Agency, Unauthorized reproduction and redistribution prohibited＞

The head of trade also hinted at the postponement of CPTPP accession. On the 28th, Ahn Deok-geun, head of trade negotiations at the Ministry of Trade, Industry and Energy, said at a press briefing, "If the CPTPP becomes a fuse that causes excessive social unrest, it could be a big problem," adding, "We currently see it as a risky time to apply for accession."

However, there are also calls for the government to expedite the CPTPP accession application. Even if the application is submitted immediately, accession negotiations, which are expected to take one to two years, are likely to start only several years later. The CPTPP has been negotiating accession with the United Kingdom since last year. China, Taiwan, and Ecuador applied for CPTPP accession last year and have been waiting for negotiations until recently.