(LEAD) South Korea aims to submit candidacy to join CPTPP during finance minister Moon presidency
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SEOUL, Dec.15 (Yonhap) – Finance Minister Hong Nam-ki said on Wednesday that South Korea intends to submit an application to join an Asia-Pacific mega free trade agreement before the end of its mandate. five years of President Moon Jae-in next May. year.
Hong said on Monday that the country had started the process of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) involving 11 countries.
“The government aims to submit the CPTPP membership application before the end of its five-year term,” Hong told foreign correspondents. South Korea will hold the presidential election in March next year.
The minister said the government will develop measures to support vulnerable sectors if the opening of the market causes economic damage.
The CPTPP is the renegotiated version of the Trans-Pacific Partnership (TPP) led by the administration of former US President Barack Obama.
In 2017, then-US President Donald Trump withdrew from the TPP, widely seen as a key counterweight to China’s growing economic weight.
The CPTPP, launched in December 2018, has been signed by 11 countries, including Japan, Australia, Canada, New Zealand and Mexico.
Seoul’s push came three months after China applied for membership in the CPTPP in a surprising move, and Taiwan followed suit.
The trade volume of the 11 countries participating in the CPTPP reached $ 5.7 trillion in 2019, representing 15.2% of the total amount of world trade, according to a report by the Korea Institute of Industrial and Trade Economics.
South Korea’s potential membership in the CPTPP could be a major boost to its decision to expand its trade portfolio in addition to its planned implementation of the Regional Comprehensive Economic Partnership (RECEP).
RECEP, which was signed in November 2020, will go into effect in February next year, as South Korea’s National Assembly ratified the trade deal earlier this month.
RECEP covers the 10 members of the Association of Southeast Asian Nations (ASEAN), South Korea, China, Japan, Australia and New Zealand. The trade pact is known as the world’s largest FTA, as its 15 member countries together account for around 30 percent of the world’s gross domestic product.
As the CPTPP calls for high levels of market opening, South Korean farmers have opposed the government’s offer, citing its potential damage to the agricultural sector.
Meanwhile, Hong spoke of the need to “proactively” consider transactions in the offshore Korean won market as the country seeks developed market status from Morgan Stanley Capital International (MSCI).
In November, Hong said the government plans to re-claim the status, as the global index provider will have its annual review in June of next year.
In June, the MSCI again classified the Korean stock market as an emerging market.
The MSCI cited the lack of an offshore currency market for the Korean won as one of the main reasons for its decision to keep South Korea in the emerging markets category.
“The government will be in talks with foreign financial institutes by the end of December to study (what it needs to improve for the forex market system) and explore its position by the end of January,” Hong said.
In response to MSCI’s request for the offshore currency market, the government said that the convertibility of Korean currency into other currencies has been greatly improved compared to the past, with the won becoming one of the strongest currencies. exchanged.
Trading in the offshore undeliverable futures market remains high, allowing foreign investors to effectively engage in foreign exchange trading for 24 hours, he said.
To transition to developed market status, a country must first be placed on the watch list for at least one year. In 2008, Korea was placed on such a list but was not granted status later. It has even been excluded from the watch list since 2014.