The South Korean government's efforts to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have hit a snag. Despite releasing economic impact assessments and soliciting feedback from various sectors, the application for membership is now unlikely to be submitted this year, raising concerns about the future of the initiative.
Fears are growing that the momentum for CPTPP membership may weaken as the government struggles to address pushback from the agricultural sector.
According to relevant authorities, President Lee Jae-myung recently instructed related ministries not to submit the CPTPP application within the year. To discuss South Korea's membership at the CPTPP ministerial meeting scheduled for November, the government would need to initiate related procedures by mid-October, but those plans have effectively stalled.
Just over a week ago, the government released its economic impact analysis. The Ministry of Trade, Industry and Energy, along with the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries, presented preliminary findings on September 28. The analysis indicated that South Korea's real Gross Domestic Product (GDP) would be 0.38 percentage points higher ten years after the CPTPP's implementation compared to a scenario without membership.
According to government estimates, the manufacturing sector is expected to see an annual production ripple effect increase of 6.3 trillion to 6.7 trillion won over the 15 years following the CPTPP's implementation. Of this, the impact on small and medium-sized enterprises is projected to be between 1.1 trillion and 1.2 trillion won.
However, the agricultural, forestry, and fisheries sectors are expected to face significant losses due to market opening. Agricultural production is projected to decline by an average of 710 billion won annually over the 15 years following the agreement's implementation, while forestry and fisheries are expected to see decreases of 60.6 billion won and 81.7 billion won, respectively. The combined production loss across these three sectors is estimated to be around 850 billion won annually.
The government has been holding briefings and discussions with stakeholders in the agricultural sector to address these anticipated losses while also gathering input from industries expected to benefit, such as manufacturing and services. The Ministry of Trade held a meeting with manufacturing representatives on October 2 and met with stakeholders from the retail, finance, content, and intellectual property sectors on October 8. Until recently, the government maintained that it was still in the process of reviewing the application for CPTPP membership and would continue to engage with stakeholders.
However, with concerns about the agricultural sector's potential losses unresolved, the president's decision to halt the application process has cast doubt on the timeline for moving forward. The Blue House has stated that CPTPP remains an important option to consider in the rapidly changing international trade landscape, but it has not withdrawn its review of membership.
The issue is compounded by the fact that discussions surrounding the CPTPP have followed a similar pattern for several years. In 2022, the government analyzed the economic effects of joining the CPTPP and even held public hearings before officially deciding to pursue membership. At that time, there was a commitment to apply for membership within the term of the Moon Jae-in administration, but the application did not materialize.
Now, despite confirming the expected benefits of economic growth and increased manufacturing output, the lack of social consensus regarding the agricultural sector's losses has prolonged the membership discussions. Particularly, with no specific timeline set for reinitiating the process, finding a breakthrough in negotiations with the agricultural sector may prove challenging, making it difficult to establish a new application timeline.
* This article has been translated by AI.
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