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|Participants from Korea listen to U.S. Peterson Institute for International Economics (PIIE) Senior Fellow Jeffrey Schott, who joined online from Washington, D.C., during the 2nd CPTPP Trade Forum at the Korea Chamber of Commerce and Industry (KCCI) headquarters in central Seoul, Wednesday. Courtesy of the KCCI|
By Yi Whan-woo
The United States may join the mega-sized, multinational free trade agreement (FTA) snubbed by former President Donald Trump sooner than expected, as part of efforts to enhance its economic alliance in the Asia-Pacific against China, according to an American expert.
“The Biden administration is concentrating its energy on domestic challenges, and so the conventional wisdom is that it will not move on the CPTPP during President Biden’s term,” U.S. Peterson Institute for International Economics (PIIE) Senior Fellow Jeffrey Schott said, Wednesday. “But should the conflict between the U.S. and China continue, it could quickly move toward strengthening economic ties with its allies.”
Schott added that CPTPP participation would be “a good solution” to establishing a new economic pact with countries in the Asia-Pacific region.
“CPTPP” stands for the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership,” and is an FTA among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Schott made the comments during the 2nd CPTPP Trade Forum, hosted jointly by the Korea Chamber of Commerce and Industry (KCCI) and the Kim & Chang law firm at the KCCI headquarters in central Seoul. Schott joined online from Washington, D.C., where the PIIE is located.
The CPTPP, which went into effect in December 2018, is a modified version of the TPP, which was central to former President Barack Obama’s strategic “Pivot to Asia” policy in that it linked 12 countries, including the United States, across the Pacific.
But Trump withdrew the U.S. from the pact in 2017 before it was signed, a move he said was aimed at protecting American jobs.
The remaining 11 countries renegotiated parts of the TPP, removed some of Washington’s demands and signed the CPTPP in March 2018.
The deal is comparable to the Regional Cooperation Economic Partnership (RCEP), a China-backed FTA between Australia, Brunei, Cambodia, China, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Vietnam. It was signed in November 2020.
Korea is also seeking to become a member of the CPTPP.
The 2nd CPTPP Trade Forum was held to discuss the outlook of U.S. trade policies, to set up Korea’s strategies, and to find out whether the country is ready to adapt to the strengthened obligations and new trade rules of the agreement upon accession.
Schott said that he finds it preferable for Korea to join the CPTPP “swiftly,” noting that it will help the country “to secure first-mover benefits” when it signs a three-way FTA with China and Japan in the future.
He stated that the obligations of the CPTPP are similar to those of the Korea-U.S. FTA, and because Korea has bilateral FTAs with most of the CPTPP members, “there is no need for Korea to hesitate on its participation.”
The forum was joined by KCCI Executive Vice Chairman Woo Tae-hee, Kim & Chang Adviser Lee Jae-hoon and others.
The participants agreed that joining the CPTPP may be beneficial for Korea. However, they also concluded that a careful review and discussions should be held before making a final decision, considering the fact that environmental standards as well as criteria regarding liberalization and state-owned enterprises are more thorough than past FTAs signed by Korea.