Seoul: South Korea will renew its efforts to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multilateral trade pact led by Japan, in order to fortify its economic alliances amid rising global trade protectionism, the Ministry of Trade, Industry and Energy announced on Wednesday.
According to Yonhap News Agency, the government plans to reconsider its stance on the CPTPP to establish a robust economic network with countries that share similar values. This move is part of a broader strategy to lessen the impact of the sweeping tariff measures implemented by the administration of U.S. President Donald Trump.
The CPTPP is a significant Indo-Pacific trade agreement involving 12 countries, including Japan, Mexico, Australia, Canada, and Vietnam, which collectively accounted for approximately 15.2 percent of global trade in 2019. Although South Korea initially aimed to join the CPTPP in 2022, formal application was hindered by domestic opposition from agriculture and fisheries sectors and a complex relationship with Japan.
An official from the industry ministry, speaking anonymously, noted that circumstances have evolved significantly since the initial plans, prompting a re-evaluation of the strategy for joining the CPTPP and engagement with member nations.
Trade Minister Yeo Han-koo emphasized during a Cabinet meeting the importance of resuming strategic deliberations on the CPTPP, highlighting the necessity for South Korea to diversify its export markets amid ongoing trade tensions between the United States and China.
Earlier, the ministry revealed a plan to allocate up to 570 billion won (US$408.8 million) in emergency financial aid this year. This initiative aims to assist South Korean companies impacted by a 50 percent U.S. tariff on steel and aluminum imports. The financial support includes a special low-interest loan program for affected sectors and measures to reduce interest rates on existing loans for small and medium-sized enterprises (SMEs).
Furthermore, the government will increase trade insurance volume to 270 trillion won from the initially planned 256 trillion won. It will also enhance access to a 13.6 trillion-won emergency liquidity fund established earlier this year for firms affected by tariffs.
Efforts to boost domestic demand for key export items like automobiles, home appliances, and steel are also underway. These initiatives may incorporate subsidy programs for electric vehicles and high-efficiency home appliances, alongside a 100 trillion-won investment fund focusing on strategic industries in South Korea.
Moreover, the government plans to strengthen measures against unfair trade practices such as tariff circumvention and dumping, while diversifying Seoul's export items and destinations.
Later this year, the government will unveil measures to improve the fundamental competitiveness of the future mobility, steel, and secondary battery industries, as outlined by the ministry.
In a pivotal agreement reached in late July, the U.S. and South Korea negotiated a reduced 15 percent tariff on South Korean imports, down from an initially planned 25 percent, contingent upon a US$350 billion investment commitment in the U.S. The agreement also entails a reduction in tariffs on Korean cars to 15 percent from 25 percent.