The Korean government has “expressed interest” in joining the U.S.-led Trans-Pacific Partnership, but experts still debate whether or not its much-delayed decision will indeed be beneficial for the nation’s economy.
Optimists claim that the mega-sized economic deal will offer Korea leverage in the Asia-Pacific, whereas opponents say that it may bring about few benefits and even deter other trade pacts, including the top-priority Korea-China Free Trade Agreement still under negotiation.
The TPP could help Korea optimize its potential lead in regional trade, according to Park Chun-il, trade studies department director at the Korea International Trade Association.
“As Korea is heavily dependent on the trade of intermediary products, it is crucial that it should have access to the manufacturing and distribution network of the TPP member states,” Park said.
He also expressed concerns that Japan, which has officially been an active member of the round since April, may gain dominance in the Asia-Pacific market.
Other government-affiliated economic think-tanks likewise promoted the economic benefits of the multilateral trade bloc.
The Korea Institute for International Economic Policy forecast in a report that Korea’s yearly gross domestic product would soar by up to $46 billion by 2025 under the TPP umbrella, but would decrease by $3 billion without it.
“The effect of joining the TPP roundtable, the world’s largest multilateral economic bloc, is equal to simultaneously signing several bilateral free trade agreements at a lower cost,” said an official of the Korea Economic Research Institute.
But Korea faces a long road ahead before actually becoming certified to join the partnership as an official member.
The government is to kick off preliminary talks with the 12 participant countries this week to convey their opinion on Korea’s participation, according to the Ministry of Trade, Industry and Energy. A new member may only join in the round upon the consensus of all participant states.
Also, there is the possibility that after detailed discussion on the range of tariff elimination, Korea may decide to break away if the multilateral pact excessively harms domestic agriculture and livestock industries, analysts noted.
The U.S. and Japan, the two leading economies of the TPP round, have recently failed to reach a consensus on the abolition of tariffs for rice, barley, sugar, beef, pork and dairy products.
“The protection of agriculture and livestock industries is one of the key reasons why we have put off our decision on the TPP,” said a ministry official.
China’s resistance to the U.S.-led trade bloc is another point of consideration, especially as Korea is part of the China-led Regional Comprehensive Economic Partnership and is currently negotiating a bilateral trade pact with China.
