Finance minister announces unofficial talks . . .
South Korean Finance Minister Hong-Nam-ki announced Monday that South Korea will “actively consider” joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Emphasizing the importance of mega-sized trade agreements in the evolving global economic order, the minister said Seoul will begin unofficial talks with the 11 existing CPTPP member countries, which include Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The Korean government said it will revise domestic institutions in four sectors – sanitary and phytosanitary, fisheries subsidies, digital trade, and state-owned enterprises – to help it meet CPTPP norms and rules.
Beating Biden to the table . . .
The government said that joining the CPTPP would help South Korea play a leading role in establishing new trade orders amid weakening WTO-led multilateralism. The announcement also comes just before the inauguration of U.S. President-elect Joe Biden, whose administration may mark a U.S. return to multilateral trading and perhaps even the CPTPP. Biden supported U.S. accession to the TPP during the Obama administration. With America’s strong negotiating power due to its political weight and market size of more than 15 per cent of global GDP, it may be in the interest of economies like South Korea to enter the agreement before potential U.S. engagement to negotiate better terms of trade.
Implications for Canada . . .
Canada and South Korea already share a bilateral trade agreement and enjoy good trade relations. But as a CPTPP member, Canada still has a stake in this new development. The combined GDP of the 11 CPTPP economies accounts for 13.4 per cent of the world’s GDP. South Korea’s entry would up that total to 15.15 per cent and, with it, increase the bargaining power of the CPTPP signatories to bring on new members and further expand market access on agreeable terms. Leveraging regional partnerships will be critical in the post-COVID recovery period and provide Canada with new opportunities for diversification beyond the U.S. and China markets.
- Business Korea: South Korea moving to join CPTPP
- Channel News Asia: Commentary: US paid dearly for absence in Pacific trade deal
- The Korean Herald: Seoul will actively pursue CPTPP: finance minister