Korea's industry ministry projects 0.38 percentage point GDP gain from CPTPP

South Korea's industry ministry said Monday that joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership would raise the country's real gross domestic product by 0.38 percentage points a decade after the pact takes effect, compared with a scenario in which Korea stays out. The estimate, based on a model using fixed assumptions, was released as a provisional figure by the Ministry of Trade, Industry and Energy together with the agriculture, oceans and fisheries, SMEs and startups ministries and the Korea Forest Service.

The gain is a cumulative effect over the ten years after the agreement enters into force, not an annual growth rate. The analysis updates a 2021 study to account for a larger CPTPP membership, shifts in major economies' trade policies and changes in domestic and international industrial and trade conditions.

The tariff changes alone would increase manufacturing-linked output by an annual average of between 6.3 trillion won and 6.7 trillion won over the 15 years after the agreement takes effect, with small and medium-sized enterprises accounting for 1.1 trillion to 1.2 trillion won of that, the ministry said. The government also expects greater participation in regional supply chains.

Over the same 15-year period, the analysis projected annual average declines of 710 billion won in agriculture, 60.6 billion won in forestry and 81.7 billion won in fisheries, with the agriculture and forestry estimates from the Korea Rural Economic Institute and the fisheries estimate from the Korea Maritime Institute.

Oceans and Fisheries Vice Minister Nam Jae-heon said the CPTPP is important for the Korean economy, pointing to export market expansion and supply chain stability, but that the effects on the fisheries industry and the burden on fishermen must be fully considered. "Without predetermining the conclusion, we will listen closely to fishermen's concerns about joining and consider ways to respond together, in line with the government's principle that discussions begin with an open mind," he said.

The ministries and the forest service released the results early, before a formal public hearing, saying they wanted to inform the public transparently about the pact's likely effects and to hear a full range of views. The government has typically disclosed the results of its trade agreement reviews at public hearings.

The figures are provisional projections and the actual impact will depend on the level of market opening for individual products agreed in any accession talks and on domestic and international market conditions, the ministry said. It plans to explain the findings and gather stakeholder opinions through briefing sessions and meetings, including concerns from fishermen that are difficult to capture in numbers.