Still a bit of a tongue twister even to experts: hard to pronounce and difficult to remember. Many tend to get the sequence of the letters wrong. The CPTPP stands for the Comprehensive and Progressive Trans-Pacific Partnership. As the name speaks for itself, this is a treaty to save the TPP -- an originally 12-nation trade agreement in the Pacific region, spearheaded by the United States. Upon Washington’s withdrawal in January 2017, the remaining 11 states joined forces to rescue the deal. They agreed to go ahead with it anyway (with a new name), waiting for the US to return.
And it worked. The CPTPP finally came into force on Dec. 30, and is now getting into full swing. This is a laudable effort. Come to think of it, this was (almost) the only positive development in trade in 2018. One could find a small ray of hope through the thick cloud of global protectionism, so to speak. Very well done.
Well, to Korea this means the Hamletian question returns – “to join or not to join.” It is the question that Korea has agonized over for the past 8 years. And without an answer. The TPP and its successor CPTPP have been elusive to Korea for many reasons. When they wanted Korea to join, Seoul hesitated. When Korea longed to participate, they turned lukewarm.
But now the time has come. With the CPTPP in full operation, Korea must confront the question upfront. What should we do?
The painful contemplation this year has to juggle two aspects: theoretical and practical.
From the theoretical aspect, the answer seems to be relatively easy. Korea should join the 11-state trade pact. National consensus seems also strong. Among others, this pact offers the most recent version of trade agreement with new norms and rules. We should stay in tune with these new developments.
Furthermore, the wide spectrum of membership is also enticing: almost all key states in the Pacific region, both developed and developing, are participating. Korea’s absence just stands out. Quite odd, indeed. After all, Korea is the 6th largest exporting country and 7th largest trading country, located in the Pacific Rim. So, purely theoretical point of view, joining seems to be a natural course of action.
But here is the practical problem -- the price tag. Just how much would the membership cost?
The bad news is that it will be substantially high. Just about a month ago (Jan. 19), the 11 states released public documents, detailing accession procedure for prospective aspirants. Not surprisingly, they expect a basically take-or-leave-it negotiation. Imagine you try to join an exclusive membership club. You probably have to accept existing members’ demands. So, they envisage a process where all 11 states start bilateral negotiations with a new candidate. All of them should sign off before a new member is accepted.
What would happen to Korea under this accession scheme? Unfortunately, its future accession appears all but impossible. Korea will have to accept almost all the demands and requests from the existing members. Quite naturally there are numerous outstanding trade issues between Korea and these 11 countries at the moment. They will obviously aim to settle these individual issues first before they throw their support for Seoul’s accession. Which means it will always be an uphill battle for Korea. Not just an uphill but a steep uphill indeed. Simply, accepting all demands from as many as 11 key states would be probably unacceptable to Korea. More so, given the slowdown of the national economy and deteriorating job market and a general election coming up. So, practically, Korea’s accession will be very, very difficult.
So, you say, “we should join,” but the question is the price of the membership. Without knowing this, and without calculating this, there is no point of agreeing or opposing the accession to the CPTPP. Let’s see the demand list and price tag, and then we can go from there. A decision here is an important national agenda for 2019.
Lee Jae-min is a professor of law at Seoul National University. He can be reached at firstname.lastname@example.org. -- Ed.