Belated legislative approvalThe ruling Democratic Party (DP) and the government should be ashamed of sitting on their hands over the ratification of the Regional Comprehensive Economic Partnership (RCEP). On Wednesday, the National Assembly’s Foreign and Unification Committee hurriedly ratified the free trade agreement among Asia-Pacific nations. A subcommittee for legislative review had to be separately held on the same day to ratify the FTA.
The Moon Jae-in administration has signed onto the regional agreement on November 15 last year. China, Japan, Australia and New Zealand have all completed ratification and will enjoy tariff exemptions from Jan. 1, 2022. The agreement was signed by Korea, China, Japan, Australia, New Zealand and 10 member nations of the Association of Southeast Asian nations (Asean). The combined gross domestic product of the economies amounts to $26 trillion and trade of $5.6 trillion, backed by a population of 2.27 billion. The RCEP will involve 30 percent of the world’s economy and population. Korea as the world’s seventh largest exporter should have rushed to capitalize on the boom.
However, the Moon administration and the DP have put off ratification for a year. Korean exports will only be able enjoy the duty exemptions 60 days after ratification. China and Japan could enter the massive markets with price competitiveness. Korean companies will miss that chance.
The government excused itself, saying the Ministry of Trade, Industry and Energy had to study the possible repercussions on farming and other industries from liberalization and come up with countermeasures. The ministry was only able to hand in the proposal for ratification in October after it finished drawing up the measures around September. But Korea is a country with a lot of bilateral FTAs and know-how on the openings.
The government has been persistently passive on trade liberalization. It addressed the U.S.-China conflict in a more diplomatic context than out of practicality. During that time, China led the launch of the RCEP and also took initiative in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after the United States under the Trump administration lost interest. Japan, Australia and New Zealand already joined the two trade agreements for the benefit of their exports. Korea is a country highly reliant on exports. The presidential office or the trade minister must explain why Korea has been late in seeking tariff benefits for exports.