Delaying Pacific trade pact entry puts Korea at risk

A government research institute has warned that joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a matter of economic survival, even as President Lee Jae Myung ordered officials last week to suspend efforts to secure membership this year.

According to a report released Wednesday by the Korea Institute for Industrial Economics and Trade (KIET), nearly half of Korean exports have lost competitiveness in CPTPP markets since the agreement took effect.

Comparing the periods before implementation (2012–2018) and afterward (2021–2024), the institute found that competitiveness indicators deteriorated for 2,474 of 5,185 Korean export products, or 47.7 percent.

The decline was particularly pronounced in major manufacturing industries, including shipbuilding and automobiles, where Korean companies have fallen behind competitors from CPTPP member countries.

The report urged Korea to regard membership not simply as an opportunity for additional economic gains but as essential to survival in regional markets. That warning deserves serious attention.

The CPTPP is a major free trade agreement involving 12 economies, including Japan, Britain, Mexico, Australia and Canada. Its members account for approximately 14 percent of global gross domestic product and 25 percent of Korea's merchandise trade, a larger share than either China or the United States.

The cost of remaining outside the agreement continues to grow.

Mexico, a CPTPP member, has responded to U.S. trade pressure by imposing tariffs of up to 50 percent on 1,463 strategic products, including automobile components, imported from countries without free trade agreements.

Korean companies consequently face disadvantages against competitors from Japan and other countries enjoying preferential access to Mexico's market.

Meanwhile, the European Union's provisional application in May of its long-negotiated trade agreement with Mercosur, the South American trading bloc, illustrates a broader transformation in international commerce.

As the World Trade Organization struggles to function effectively, regional economic partnerships are filling the vacuum and establishing new trade rules.

Industry and Trade Minister Kim Jung-kwan captured the essential point when he remarked that it would be stranger for a trading nation like Korea not to join the CPTPP.

Former President Roh Moo-hyun once sought to persuade progressive supporters opposing the Korea-U.S. free trade agreement by arguing that none of their earlier warnings about economic openness had subsequently proved true. His example remains relevant as Korea confronts another consequential trade decision.

Admission to the CPTPP requires unanimous approval from existing members. The longer Korea delays, the more countries it may eventually need to persuade. There is no longer time to waste calculating the political advantages and disadvantages for the administration.