Korea delays CPTPP bid amid farmer backlash

Korea will not apply to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) this year after President Lee Jae Myung shelved the bid in the face of opposition from farmers and fishers.

Critics argue that Korea is letting domestic interests hold back its trade policy just as U.S. tariff pressure and spreading protectionism upend the global trading order. The country risks missing a chance to widen its export markets and diversify its trade, they warn.

Lee ordered the government on Thursday not to submit a membership application this year, two days after he told a Cabinet meeting to revisit the issue from scratch. The government had planned to push for membership around a CPTPP ministerial meeting that Vietnam hosts in November.

“Above all, restoring trust between the government and farmers and fishers comes first,” presidential spokesperson Kang Yu-jung said in a written briefing Thursday.

Lee also told ministries to keep listening to farmers and fishers rather than set a deadline, Kang said. For Korea’s bid to come up at the November meeting, the government would have had to announce a public hearing plan in the official gazette by mid-October.

The government will use state funds to cover a 700 billion won ($522.3 million) shortfall in the Agricultural and Fishing Villages Collaborative Cooperation Fund, the Blue House said. Lawmakers agreed to create the fund, with a target of 1 trillion won, as a condition for ratifying the Korea-China FTA in 2015.

The CPTPP is a 12-member trade bloc that includes Japan, Canada, Australia and Mexico. It took effect in 2018, and its members together account for about 15 percent of global GDP. The pact aims for a high level of market opening and phases out most tariffs on goods traded among members in stages.

“Korea is an open trading nation that depends on trade, so FTAs are unavoidable for expanding its export markets,” Lee wrote on X on Sept. 29 in a post explaining why Korea needed to join. “But while most benefit as a result, there are sectors that suffer losses, namely farmers, livestock farmers, fishers and forestry workers.”

The sudden shift is widely seen as an effort to avoid deepening discontent among farmers, who have pushed back hard against a nationwide government survey of farmland ownership meant to root out speculation.

“We had been holding talks behind the scenes with several countries to apply this year, but it is unfortunate that trade policy wavers with the domestic political situation,” a government source said. 

Korea’s push to join the trade bloc has stalled before. The Park Geun-hye administration expressed interest in 2013 in the Trans-Pacific Partnership, the CPTPP’s predecessor, but put other negotiations such as the Korea-China FTA first and never joined the talks. The Moon Jae-in administration formally pursued membership in 2021 and approved an accession plan in April 2022. Opposition from farmers and fishers and delays in reporting to the National Assembly kept it from ever filing an application.

The delay also pushes back the economic gains the government expects. Joining would put Korea’s real GDP 0.38 percentage points higher after 10 years than if it stayed out, according to an analysis released Sept. 28 by the Ministry of Trade, Industry and Resources and other ministries.

Production in manufacturing and its upstream and downstream industries would rise by an average of 6.3 trillion won to 6.7 trillion won a year over the first 15 years after the pact takes effect. Small- and medium-sized enterprises would account for 1.1 trillion won to 1.2 trillion won of that a year.

Farming, forestry and fisheries, on the other hand, would lose an average of 710 billion won, 60.6 billion won and 81.7 billion won in output a year, respectively, over the same 15 years. Farmers and fishers would take a hit, but critics warn that waiting could cost Korea bigger opportunities, from growth in manufacturing to wider export markets.

The CPTPP has also drawn attention as a key platform for middle powers to defend free trade and deepen trade and investment ties amid U.S.-China trade tensions and spreading protectionism.

“It is a trade strategy Korea needs too at a time when the World Trade Organization is not doing its job,” Heo Yoon, an international trade professor at Sogang University, said. “In particular, Korea can expect benefits such as tariff cuts and the cumulation of origin in trade with countries like Japan and Mexico, with which it has no bilateral FTA.”

Staying out could also leave Korea sidelined as new rules on digital trade and supply chains take shape. At a meeting the trade ministry held with the services industry on Thursday, companies in services and intellectual property stressed the need for trade rules against online piracy, trademark theft and technology theft as more Korean content goes overseas. Joining the CPTPP could strengthen intellectual property protection in overseas markets and lower barriers to entry for Korean companies, participants said.

The longer Korea waits, the more complicated negotiations could become. Joining requires the consent of every existing member. Britain joined in 2024, Costa Rica and Uruguay are in accession talks, and Indonesia, the Philippines and the United Arab Emirates are in early-stage discussions.

“A delay of one or two years in itself does not immediately lead to a big disadvantage,” Jang Sang-sik, head of trade trend analysis at the Korea International Trade Association, said.

“But as membership keeps growing, an applicant has to negotiate with every member and win its consent, so negotiations could take longer and there could be more to concede.”

Some observers expect the delay to rule out membership under the current administration altogether, given how long accession talks and domestic ratification take.

“Two approaches are needed: minimizing how far sensitive items are opened up and compensating for the damage,” Jang said. “Tariffs on agricultural, livestock and fisheries products should be lowered gradually over a long period, or safeguards used. At the same time, there should be investment in retirement support for elderly farmers and in raising agricultural productivity.”

BY NAM SOO-HYOUN, AHN HYO-SEONG [[email protected]]