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Is South Korea Ready to Join Trans-Pacific Partnership?


The recent slug fest between Democrats and Republicans in the US Congress on granting President Obama Trade Promotion Authority (TPA or fast track authority) that will allow him to craft trade agreements and then force a Congressional vote under expedited procedures and without amendments has implications beyond the American shores. For one, it will help the US President bring in South Korea as one of the negotiating countries as part of Trans-Pacific Partnership or TPP.

The TPP is a proposed regional regulatory and investment treaty being negotiated by 12 countries Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the US. The proposed pact for which initial talks started in 2005 intends to enhance trade and investment among the TPP partner countries; promote innovation, economic growth and development and support the creation of jobs. The countries taking part in it initially aimed to wrap up negotiations in 2012, but contentious issues such agriculture, intellectual property and services & investments have caused negotiations to continue, with the last round meeting in Ottawa in July 2014.

Four of the 12 countries ratified the Trans-Pacific Strategic Economic Partnership Agreement in 2006, while eight more have joined negotiations for TPP whose text has not yet been finalised.

South Korea was invited to the TPP negotiating rounds by the US after the successful conclusion of the free trade agreement between the US and South Korea in December 2010. South Korea already has bilateral trade agreements with some TPP members.

Taiwan, the Philippines, Laos, Columbia and Thailand are among other countries which are said to be joining TPP sometime in the future. Cambodia, Bangladesh and India too are listed as potential members. Notable exclusions from TPP negotiations are China--which has been accelerating its own trade initiatives in Asia and maybe interested in joining the TPP eventually--and Japan, the world's third largest economy. Bringing these two behemoths into the negotiation would set the stage for a final agreement covering more than 50 per cent of world economic output.

During her visit to Washington, DC recently, South Korean President Park Geun-hye indicated East Asia's third-largest economy's willingness to TPP. She described the Republic of Korea as 'a natural partner' in TPP, in part because it has bilateral free trade agreements with almost all TPP members. Despite being a 'natural partner', why has South Korea been reluctant to join the partnership? Seoul's reluctance to join TPP is said to be due to its intention to distance itself from US-led regional coalitions so that its relations with China will remain intact. South Korea has been perceived as more keen on seeking a bilateral free trade agreement (FTA) with China, which absorbed 26 per cent of South Korea's exports last year as its number one trade partner (the bilateral trade between the two countries has already reached $221 billion), than joining a coalition led by the US.

Also, since it has bilateral free trade agreements with nearly all TPP members, it thought it would be redundant to join the forum. In addition, Korean policymakers relied more on economic data (according to a 2014 study by the Korea Institute for International Economic Policy, a government think tank, joining TPP would increase Korea's GDP between 1.7 and 1.8 percent over 10 years) to assess the merits of TPP without weighing other geopolitical benefits. The purely economic perspective missed the fact that the TPP is more about extending global standards to the region at a time when regional powers are vying to dictate how business gets done. President Park's recent announcement in Washington that South Korea is ready to join TPP reflects a strategic shift in South Korea's trade interests. It seems the country is realising that to be a regional player, it needs to go broaden its perspective and consider both tangible and intangible benefits of trade deals.

South Korea's new-found interest in TPP reflects a similar desire by Indonesia--recently Indonesian President Joko Widodo said his country is ready to join TPP in two years, arguably triggered by concerns that Indonesia--a G20 member with about a $1 trillion economy--may fall behind its neighbours which have joined the accord, including Australia, Brunei, Malaysia, Singapore and Vietnam.

However, South Korea renewed interest in TPP is likely to anger its critics who oppose South Korea's entry into TPP negotiations, citing its deteriorating human rights record.

A United Nations investigation into South Korea's human rights abuses points to the fact that migrant labourers and immigrant families from the Philippines, Vietnam, China and elsewhere in South Asia are treated badly in the country. According to a human trafficking watchdog, South Korea is a source, transit and destination for human trafficking of men and women subjected to forced prostitution and labour. The country also has a bad reputation of being racist towards people from other countries especially those from China, Vietnam, Philippines and Japan. Last year, The Korea Herald reported instances of discrimination against those who wish to immigrate to the country from Cambodia, Mongolia, Uzbekistan and Thailand in addition to China, Vietnam and the Philippines.

A study by Hyundai Research Institute showed that 44.2 per cent South Koreans do not think of immigrants or migrant workers as their neighbours. This figure was significantly higher than in many other nations. For example, only 21 per cent of Germans, 10 per cent of Australians and just over 3 per cent of Swedes say the same thing. In addition, according to the study, an alarming 31.3 per cent of South Koreans said they do not accept different religions while only 3.4 per cent of people answered the same in the US. Amnesty International also published a report recently highlighting widespread use and exploitation of forced migrant labour in the agricultural sector in South Korea.

The US' move to welcome South Korea to join negotiations on an Asia-Pacific free trade agreement is amid Japan's bid to enter the same set of talks. South Korea, the world's 15th largest economy, has been much more aggressive than Japan in negotiating free trade agreements, having already struck deals with the US and the EU.

The TPP that aims to overhaul trade relations among member nations and establish new rules in areas as diverse as intellectual property, labour and the role of the governments in private enterprise, has also been seen as a threat to China's international trade influence. However, the US has made it clear that China and other nations are free to join the TPP as long as they can abide by partnership's rules.

Roping in China into TPP would enhance South Korea's interests considering its strained relationship with Japan, another Asian giant which is also seen as a possible TPP member.

While South Korea is likely to part of TPP talks and eventually be a member, how soon that should happen is the question that needs to be answered considering its unimpressive human rights record and its poor relationship with Japan.

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