Korea will probably conclude free trade agreements with its major trade partners by the end of the year, with President Park Geun-hye and her Chinese counterpart, Xi Jinping, having finally agreed to wrap up negotiations on a bilateral trade accord by December.
The only exception will be Japan, negotiations with which are now stalled. There is little likelihood that they will resume anytime soon, given that Korea has sharply reduced its diplomatic contact with Japan, which is attempting to rewrite its colonial history to the chagrin of its victimized Asian neighbors, including Korea.
Instead, Korea should pay greater attention to U.S.-led multilateral negotiations on free trade among Pacific countries. Delegations from 12 Pacific countries, including Japan, are currently conducting working-level negotiations on a free trade framework, the Trans-Pacific Partnership, in Ottawa.
Korea has yet to apply for participation in the negotiations in the face of vocal opposition from special interest groups, including those representing farmers. The Korean government, which undoubtedly wishes to become a founding member of the proposed Pacific free trade community, has deferred its final decision, ostensibly because it did not want to be distracted from its negotiations with China.
With the talks with China nearing completion, the Korean government will have to apply for participation in the TPP talks while persuading special interest groups to drop their opposition to its move. With time running out, it cannot afford to drag its feet indefinitely.
True, the Ottawa talks, scheduled to continue until Saturday, do not appear to be making as much progress as desired by Washington. Canada says no conference is planned for ministerial trade officials from the 12 countries to resolve final hindrances on the margins of the working-level talks.
One of the greatest obstacles is Japan’s barrier to agricultural imports, on which Washington and Tokyo still remain far apart. It will not be easy to bridge the gap when representatives from the two wealthiest countries, which account for 80 percent of the combined gross domestic product of the 12 countries, meet in Washington on Monday and Tuesday, as scheduled.
Yet, an early breakthrough cannot be ruled out, with U.S. President Barack Obama desiring to wrap up the talks on the Trans-Pacific Partnership by November. In June, Obama said he wanted the negotiating countries to produce an agreement in time for his trip to Asia scheduled for then.
As such, Korea will have to apply for participation as soon as possible. It cannot afford to miss out on an opportunity to expand its external trade, with the planned free trade zone encompassing 40 percent of global domestic product and one third of world trade.
According to a think tank’s estimate, Korea, when admitted to the Trans-Pacific Partnership, will be able to generate an additional increase, 2.5 percent to 2.6 percent in real terms, in gross domestic product in the 10 years after the treaty takes effect. When denied admission, the think tank says, it will suffer a small GDP decline, ranging from 0.11 percent to 0.19 percent, during the same period.
As a popular Korean adage goes, it is of no use to wave and run to catch a bus when it is already driving away. Korea will have to jump on the bus before it departs.