South Korea joins China, Taiwan in bid for CPTPP entry, but concerns remain over Japan's stance

South Korea is seeking to join the 11-member CPTPP trade pact citing "fast changes to the economic order in the Asia-Pacific region", raising questions about whether its tense relations with Japan, the largest economic power in the bloc, will get in the way.

"South Korea will initiate the relevant procedures based on discussions with various interested parties to push the membership of the CPTPP," Finance Minister Hong Nam-ki said on Monday at a policy meeting in Seoul.

Originally meant to be for Asia-Pacific nations, the CPTPP has been gaining significance as a global agreement, recently attracting interest from Britain as well as mainland China and Taiwan. The pact links Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.

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China and Taiwan's applications to join the trade bloc came after the US, Australia and Britain struck a security alliance which includes an agreement to help Canberra secure a fleet of nuclear-powered submarines.

In 2019, the 11 economies imported a combined US$126 billion of South Korean goods, which corresponded to 23.2 per cent of the country's total exports that year. They also sold US$124.9 billion of goods and services to South Korea, accounting for 24.8 per cent of its imports in 2019.

Kim Soo-dong, research fellow of the Korea Institute for Industrial Economics and Trade (KIET), said tense ties with Tokyo had made Seoul initially hesitant to seek CPTPP membership. Officials were also concerned that South Korea's materials, parts and facility industries could be overwhelmed by Japanese competitors and its trade imbalance could worsen.

But Seoul eventually concluded the challenges would be manageable, Kim said, as the country had sufficiently reduced import tariffs as a result of the RCEP trade deal that it ratified this month, following many other free-trade agreements, he said. The RCEP links the 10-member Asean bloc with five partners.

"It is highly likely Japan will impose tough preconditions for South Korea and China to accept to join the CPTPP," Kim said.

Japan was a major force in pushing through the CPTPP after the US withdrew from the pact under the Trump administration. It currently holds the presidency of the CPTPP's decision-making body.

Japan and South Korea share a complicated bilateral relationship, which has been strained by distrust linked to historical issues including Tokyo's colonial rule from 1910-1945, but includes having to work together as US allies.

On one hand, analysts suggest that Japan and South Korea are under pressure from the United States to patch up ties for the sake of greater regional security. Yet some Japanese conservatives are critical over the left-leaning Moon government's bid to strike a closer relationship with North Korea and China, as well as South Korea's "hostility" towards Japan over matters of shared history, which has spilled over into the economic realm.

"South Korea would surely qualify for membership of the CPTPP and would be a valuable trade partner for other nations who are members already," said Jeff Kingston, director of Asian Studies at the Tokyo campus of Temple University.

"It would be very awkward for Japan to stand in the way of South Korea's membership as it is a democratic state that's committed to capitalism, has a relatively free market and is a market leader in many sectors, such as semiconductors," Kingston said. "There are all sorts of reasons to allow Korea to join the CPTPP and not many, from a trade perspective, to block an application."

Yoichi Shimada, a professor of international relations at Fukui Prefectural University, however said the Moon government's policy on China and North Korea put Japan's interests at risk.

"My concerns are primarily on the political side of any trade agreement, which are inevitable. Moon is collaborative towards North Korea and very close to China. We cannot trust Moon not to share sensitive information from within the CPTPP with President Xi [Jinping]," he said.

"Also, the Moon administration has taken a very hostile attitude towards Japan with regard to historical issues, with Korean courts passing rulings against Japanese companies in cases involving Korean workers in Japan during the war and ordering the seizure of their assets," Shimada said.

One sector that Japan might seek to pressure South Korea would be food exports. Seoul remains reluctant to resume imports of foodstuffs from parts of northern Japan that were affected by radioactive fallout from the meltdown of three reactors at the Fukushima Dai-ichi nuclear plant in March 2011.

On Friday, Britain's Food Standards Agency began the process of public discussion on a proposal to lift restrictions of food import from Japan after experts concluded that the risk of radioactive substances in food imported from Japan is "negligible".

The foodstuffs on the banned list include mushrooms and derived products, a range of fish and marine products, bamboo shoots and persimmons.

Aware that Britain is keen to join the CPTPP as it is no longer a part of the European Union, Japan has been ramping up the pressure on London to drop its ban.

Japanese Foreign Minister Yoshimasa Hayashi raised the issue earlier this month in a phone call with his British counterpart, Liz Truss, while Prime Minister Fumio Kishida made a similar appeal to Boris Johnson on November 2 on the sidelines of the COP26 meeting in Glasgow, with Johnson commenting that he would give the request "positive consideration".

Meanwhile, Japan is also expected to make demands on China's CPTPP membership, said researcher Kim from KIET.

"Tokyo is likely to call for free flows of data and a cease to government subsidies to state-financed companies and interventions in businesses," he said.

This article originally appeared on the South China Morning Post (SCMP).

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