SEOUL– South Korea began the process to join a mega Asia-Pacific free trade agreement involving 11 nations, the finance minister said Monday, as the country seeks to diversify its export portfolio.
South Korea has been “actively” reviewing the joining of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as part of its efforts to expand mega FTAs in the Asia-Pacific region.
“The government is trying to collect public opinions and social discussions on the CPTPP accession,” Finance Minister Hong Nam-ki told a government meeting.
He said the government seeks the CPTPP accession to expand trade and investment and enhance the country’s status as a major player in global trade.
The CPTPP is the renegotiated version of the Trans-Pacific Partnership (TPP) led by the former U.S. President Barack Obama administration.
In 2017, then U.S. President Donald Trump withdrew from the TPP, widely seen as a key counterweight to China’s growing economic clout.
The CPTPP, launched in December 2018, has been signed by 11 countries, including Japan, Australia, Canada, New Zealand and Mexico.
Seoul’s push came three months after China submitted an application to accede to the CPTPP in a surprising move and Taiwan followed suit.
Trade volume by the 11 nations participating in the CPTPP had reached US$5.7 trillion as of 2019, accounting for 15.2 percent of the total global trade amount, according to a report by the Korea Institute for Industrial Economies & Trade.
South Korea’s potential accession to the CPTPP could be a major boost for its move to expand trade portfolio in addition to its planned implementation of the Regional Comprehensive Economic Partnership (RECEP).
The RECEP, which was inked in November 2020, will go into effect in February next year as South Korea’s National Assembly ratified the trade deal early this month.
The RECEP covers the 10-member Association of Southeast Asian Nations (ASEAN), South Korea, China, Japan, Australia and New Zealand. The trade pact is known as the world’s biggest FTA as its 15 member countries combine to account for around 30 percent of the global gross domestic product.
Hong also said South Korea will prepare to resume talks for free trade deals with Mexico and the Gulf Cooperation Council.
As the CPTPP calls for high levels of market openness, South Korean farmers have opposed the government’s bid, citing its potential damage to the agricultural sector.
The accession will also have the same impact of signing FTAs with Japan and Mexico. This could aggravate South Korea’s trade deficit with Japan, according to industry experts.
Source: Yonhap News Agency