April 20, 2024

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Trade Minister Yeo Han-koo (center) speaks during his meeting with executives from business lobbies in Seoul, Wednesday. (Yonhap)

SEJONG -- South Korea is projected to see export growth in the steel and textile sectors if the nation becomes a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

But sectors like machinery, fine chemistry and auto parts could suffer handicaps in the wake of the technology gap with Japan, according to forecasts from a variety of business lobbies.

The associations delivered their outlook for each industry if the country were to be a member of the CPTPP to the Ministry of Commerce, Industry and Energy during a meeting with Trade Minister Yeo Han-koo, held in Seoul on Wednesday.

Their predictions come as the Korean government is poised to submit an application to join the CPTPP, an entity aimed at multilateral free trade agreements in the Asia-Pacific region.

The local business associations expected that Korea would be able to overcome disadvantages, compared to Japan, in export destinations including Mexico, Vietnam and Malaysia under entry to the CPTPP.

They picked steel and textiles as major segments that would see boosts in outbound shipments to the three nations.

In addition, they said digital-oriented companies could possibly see steady growth when free trade terms on data-related business are introduced in the multilateral entity.

In contrast, the lobbies cast worries over a scenario in which some sectors, including auto parts, would suffer difficulties in export competitiveness. They called for the government to take preemptive countermeasures against the projected disadvantages in an active manner.

Government officials replied that relevant ministries would expand support for small and midsized enterprises specializing in materials, assembly parts and equipment, as well as others seeking futuristic industries.

The support will be provided in terms of research and development, manpower, financial loans, digitalization and eco-friendly measures, said the officials.

Minister Yeo said, “The nation needs to find a fresh opportunity via the CPTPP in a bid to attain another takeoff of the economy.”

The government would consult business associations to minimize any side effects caused by the entry to the entity of multilateral trade agreements.

The CPTPP is the renegotiated version of the Trans-Pacific Partnership initiated by the Barack Obama administration. In 2017, his successor Donald Trump withdrew from the TPP, which was widely seen as key to countering China’s growing economic clout.

The multilateral trade pact, launched in December 2018, has been signed by 11 countries: Japan, Brunei, Singapore, Malaysia, Vietnam, Canada, Mexico, Peru, Chile, New Zealand and Australia.

Korea’s willingness to join the pact came several months after China submitted an application to accede from the CPTPP in a surprising move, with Taiwan following suit.

By Kim Yon-se (kys@heraldcorp.com)