South Korea's real gross domestic product would be 0.38 percentage point higher a decade from now if the country joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, according to government estimates released on the 28th. The analysis attributes the gain to expanded manufacturing output driven by increased trade with the middle powers already in the pact. Farming, forestry and fisheries output, by contrast, would fall by more than 800 billion won a year on average.
The Ministry of Trade, Industry and Energy released the preliminary findings on the economic impact of CPTPP membership on the 28th, together with the Ministry of Agriculture, Food and Rural Affairs and other related ministries. The preliminary analysis projected that the production-inducing effect across upstream and downstream industries tied to manufacturing goods would reach an annual average of 6.3 trillion to 6.7 trillion won ($4.5 billion to $4.8 billion) over the 15 years after the agreement takes effect. Of that, the output gain for small and medium-sized enterprises alone amounts to 1.1 trillion to 1.2 trillion won.
The decline in farming, forestry and fisheries output from joining the CPTPP, meanwhile, was put at an annual average of 852.3 billion won over 15 years. Farming accounted for 710 billion won of that, forestry for 60.6 billion won and fisheries for 81.7 billion won. That means the manufacturing gains from CPTPP membership outweigh the damage to the primary sector.
"With the World Trade Organization system effectively hollowed out, many countries are leaning on multilateral trade agreements such as the CPTPP to restore order in trade," a government official said. "The macroeconomic benefits are also clear, so there is no longer any reason to delay joining."
