It has been found that the Korean government disregarded the advice of the Korea Institute for International Economic Policy (KIEP) in that the institute said that Korea’s accession to the Trans-Pacific Partnership (TPP) could entail bigger economic losses than its participation in the scheme.
Justice Party lawmaker Kim Je-nam, who is a member of the Trade, Industry & Energy Committee of the National Assembly, made public a report on Oct. 19 that said that the time difference resulting from opting for the accession instead of the participation is likely to lead to significant economic losses. The report was drawn up by the KIEP in Aug. 2013, entrusted by the Ministry of Trade, Industry & Energy.
“There is a big difference between the participation in and accession to the TPP,” the report read, adding, “Korea’s national interests can be reflected in the negotiations in the case of the former whereas the latter compels Korea to comply with fixed rules, which results in more opportunity costs and more resistance on the domestic side.”
The report continued that Korea’s real GDP is estimated to decrease by US$2.8 billion, or 0.1 percent, while Japan’s increases by US$104.6 billion, or 2.0 percent, in 2025 on the condition that Japan participates in the TPP in 2013 and Korea does not. It also mentioned that Korea’s participation in the TPP in 2014 would increase its GDP by US$45.8 billion, or 2.2 percent, while impeding the opening of key agricultural markets and providing more opportunities for Korean manufacturers’ overseas business.