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S. Korea’s accession to CPTPP likely to boost real GDP, damage agricultural sector

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Yonhap | 25March 2022

S. Korea’s accession to CPTPP likely to boost real GDP, damage agricultural sector

SEOUL, March 25 (Yonhap) — South Korea’s envisioned joining of a mega free trade deal in the Asia-Pacific region could boost its real gross domestic product (GDP) up to 0.35 percent, but it could cause substantial damage to the agricultural and fisheries sector, the industry ministry said Friday.

The Ministry of Trade, Industry and Energy made public its assessment during a public hearing earlier in the day on the country’s push to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

South Korea is working to submit an official application next month to joining the CPTPP, which involves 11 nations, including Vietnam, Japan, Canada, Mexico, Australia and New Zealand, and had accounted for around 15 percent of the world’s total trade volume of US$5.2 trillion as of 2020.

According to government assessments, the new trade deal is expected to boost South Korea’s trade, production, investment and employment, which would increase the country’s real GDP 0.33 to 0.35 percent.

In particular, net exports in the manufacturing industry are forecast to rise up to US$900 million per year on average over the next 15 years, and the yearly production volume would increase by around 1.82 trillion won (US$1.49 billion), the ministry said.

The multilateral economic platform is also expected to help Seoul ensure stable supply chains and strengthen its strategic ties with partner nations, it added.

But the market opening is likely to cause the production in the agricultural sector to fall by around 85.3 billion to 440 billion won per year for 15 years to come, and the envisioned growth in fisheries imports would also reduce local production worth up to 72.4 billion won per year, according to the ministry.

For compensation, the government vowed to come up with various supportive measures, such as subsidies to the affected businesses, tax incentives, and support for their research and development.

But the agricultural and fisheries circles have strongly opposed the move, and dozens of angry farmers and fishermen staged a protest at the venue of Friday’s hearing to disrupt the event.

"We expect considerable negative impacts on those industries by the agreement, and we are trying to listen to their voices to seek appropriate supportive measures," industry ministry official Chun Yoon-jong said.

 source: Yonhap