With protectionism spreading and the multilateral trade order built around the World Trade Organization weakening, academics are urging South Korea to move aggressively to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Their argument goes beyond lowering tariff barriers with countries such as Japan and Mexico: Korea must secure a place in the group of "rule makers" that will shape trade norms across the Asia-Pacific region. As U.S. unilateralism intensifies and Korean companies expand investment in the United States, the country needs a two-track strategy — easing labor and regulatory rules at home to boost its appeal to investors, while widening its multilateral trade network abroad.
Chung Chul, president of the Korea Association of International Trade and head of the Korea Economic Research Institute, and Kim Sung-hyun, president of the Korea International Economic Association, made the case at a roundtable hosted by Seoul Economic Daily at the FKI Tower in Seoul's Yeouido district on the 28th. "The weaker the WTO's function becomes, the more necessary plurilateral agreements like the CPTPP are," they said. "The benefits of joining the CPTPP should not be viewed solely as a question of cutting tariffs by a few percentage points." They added that "taking part in designing the trade norms that will be created going forward matters more."
Chung said CPTPP members are "the most advanced countries in the area of trade." He stressed that "the stronger nationalism and protectionism become, the wider the playing field must be laid out so that companies can compete on their own merits." Free trade agreements, he said, should be seen not as mere instruments for cutting tariffs but as institutional infrastructure supporting corporate investment, production and exports. "The core of the CPTPP lies not in immediate tariff effects but in whether Korea can move from being a rule taker to a rule maker," he said.
Kim agreed, saying the practical value of CPTPP membership should not be limited to lower tariffs in markets such as Japan and Mexico, where Korea has no bilateral free trade agreement. It should instead serve as a venue for continuously coordinating emerging international standards in supply chains, digital trade, investment, the environment and labor.
Both said, however, that adequate support measures are needed for industries such as agriculture, livestock and fisheries, which would face shocks during the accession process. Agricultural exporters including Australia, Canada and New Zealand are seen as likely to demand further market opening.
Alongside expanding the external trade network, the two identified improving the domestic investment climate as an urgent task. They drew a line against the view that growing corporate investment in the United States is the cause of weak investment at home, noting that if Korean companies scale back U.S. investment, other countries or companies are likely to take those markets.
"Not investing in the United States doesn't mean that money comes back as domestic investment," Chung said. "Investing in the U.S. is an unavoidable choice for survival in the American market." Kim said it is "only natural for companies to choose overseas investment if it is more advantageous than investing at home," adding that "the right approach is to create an environment where domestic investment is more advantageous."
To expand domestic investment, the two called for easing labor market rigidity and regulations, and for improving living conditions for foreign executives and staff, including housing and schooling for their children. Chung said "there is a need to simultaneously discuss flexicurity, which raises labor flexibility while complementing it with employment security."
They also warned against overlooking structural weaknesses in the Korean economy amid the semiconductor boom. "Looking only at macroeconomic figures, the Korean economy may appear to be in an unprecedented boom, but excluding a handful of companies and industries that are doing well, the situation could be entirely different," Kim said. As the chip industry rides a super cycle and lifts growth, exports and tax revenues, he said, it can mask weakness in sectors facing oversupply and intensifying competition, such as steel, petrochemicals and batteries.
Both agreed that expanded fiscal capacity should be channeled into industrial restructuring and the shift to future industries rather than prolonging the survival of marginal firms. Restructuring should be accelerated in industries exposed to Chinese oversupply, they said, while infrastructure and institutional support should enable businesses to pivot into high-growth areas such as autonomous driving and robotics. "Rather than keeping alive companies that ought to fail, fiscal resources should be used for restructuring and the transition to competitive industries," Kim said.
Chung said that "structurally, nothing has changed in the fundamentals of the Korean economy — what we have is a choke point in semiconductors, a strategic bottleneck." He added, "Crisis and opportunity have arrived at the same time."
