South Korea's Involvement with the TPP

Tweet

September 15,2014

    South Korea may join the Trans-Pacific Partnership (TPP) along with 12 other nations, including the United States, after the negotiations have been completed, but before the ratification of the agreement.  Initially, South Korea said they might partake in the actual negotiations, instead of exclusively conducting meetings with current TPP members on the sidelines.  The United States has continuously stated that is does not want to include additional countries in the current discussions.  In November of 2013, United States Trade Representative Michael Froman confirmed, “the possible entry of any new country [into TPP negotiations] would be expected to occur after the negotiations among the current members are concluded."

    It would be beneficial for South Korea to join the TPP before the ratification, because it makes the process less complicated.  Choi Kyonglim, the Deputy Minister for Trade from South Korea, stated that if the Asian nation joins the TPP, it would want current free trade agreements with individual nations to remain intact.  The current dialogues are complicated and Choi remarked, “Since the TPP negotiations involve a large number of participants, and also the scope of negotiation is quite broad, our consultation process for the TPP negotiation is more extensive [compared to] previous negotiations."

    Studies conducted by the Korea Institute for International Economic Policy (KIEP) illustrated that the country’s GDP would grow 1.7% to 1.8% over a decade if it joined the TPP.  However, by abstaining from the TPP, South Korea’s GDP is predicted to shrink .1% to .2%.  While entering into the TPP agreement may increase the GDP, it has varied effects across South Korea’s economy.  Manufacturing divisions are predicted to gain more value, but the agricultural sector of the economy would suffer.

    Currently, the U.S. is working to resolve disagreements with South Korea regarding the U.S.-Korea free trade agreement over organic produce, rule-of-origin oversight, financial data flow, and emissions disagreements.   At the end of 2013, Acting Deputy U.S. Trade Representative Wendy Cutler made it clear that the results of the negotiations between the two countries would affect U.S. support of South Korea joining the TPP.

For more information, please continue to visit www.barnesrichardson.com.