• Korea Trade Review
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• v.45 no.1
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• pp.137-153
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• 2020

On February 14, 2019, the government of Korea formally decided to consider the feasibility of joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and has since been conducting bilateral consultations with individual member countries. In terms of the impact estimation, the CPTPP is actually a Korea-Japan FTA, and the most sensitive issue in the FTA is the opening of the auto industry market to Japan. Despite these circumstances, previous studies have predicted that the auto industry will be a beneficiary industry when joining the CPTPP. However, the Korean auto industry is opposed to joining the CPTPP. In order to investigate the cause of this discrepancy, this paper examines the problems of previous studies in estimating the impact of joining the CPTPP and found that the preceding study did not consider the industrial characteristics of the auto sector, especially in the context of Japan-Korea trade, and was heavily dependent on the Armington elasticity (structure) in the demand function of the GTAP CGE model. As a result, the domestic auto sector could lower prices and increase exports when joining the CPTPP. This paper attempts to precisely re-estimate the impact of joining the CPTPP on the auto sector in a way that corrects these problems by changing the CGE model and reflecting the major characteristics of the industry, with policy implications for the negotiation of CPTPP accession.

• Journal of Industrial Convergence
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• v.21 no.5
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• pp.43-50
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• 2023

The South Korean government announced its plan to pursue membership in the CPTPP in 2022, aiming to establish a stable supply chain within the Asia-Pacific region. The CPTPP, led by Japan, was ratified in 2018 by 11 countries with the goal of eliminating tariffs and establishing new trade rules. According to our analysis, since the implementation of the CPTPP, there has been a trade promotion effect among Japan and member countries, with greater effects observed in countries with higher GDP per capita and closer geographical distance. As long as tariff elimination and reduction proceed as planned, the trade promotion effects are expected to expand gradually. However, the expansion of trade between Japan and CPTPP member countries may also indicate a relative contraction in trade with non-member countries, potentially posing a threat to the stable supply chain in the Korean industry within the Asia-Pacific region. As Japan is Korea's fourth-largest trading partner, it is necessary to carefully consider the impact of CPTPP on Japan's future trade with member countries and engage in discussions regarding Korea's participation and negotiation content based on a thorough examination of the matter.

• Korea Trade Review
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• v.47 no.1
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• pp.199-214
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• 2022

This study aims to quantify the value of origin among CPTPP and Korea, under the assumption that the 'cumulation' clause has large economic effects in multilateral FTAs and increase the possibility of improving FTA utilization. Analysing the relationship between value-added exports and FTA utilization rate, there is a positive correlation between the two variables, and the cumulation of multilateral production of CPTPP is expected to increase Korea's value-added exports. In the GTAP-VA model, the target of cumulation is calculated as 'Domestic Value Added', and all value-added of CPTPP are cumulated in the form of value added exports of exporting country. When Korea participates in CPTPP, it is possible to cumulate additional 6.3~9.6% value added, and the agreements with low FTA export utilization rates such as New Zealand, ASEAN would have greater economic effects of cumulation. For the successful implementation of CPTPP in Korea, it is necessary to develop a new origin verification system that enables multilateral value-added cumulation. It is time to seek cooperation with countries currently participating in CPTPP to prove the value added inherent in CPTPP-originating products.

• Journal of Korea Trade
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• v.27 no.3
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• pp.147-160
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• 2023

Purpose - This paper aims to investigate the competitiveness and complementarity of the agricultural products trade between Korea and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries. The study evaluates the opportunities and challenges that Korea's agricultural sector faces after joining the CPTPP, and suggests strategies to deepen cooperation and expand Korea's agricultural products trade. Design/methodology - To achieve these objectives, we analyze the trade competition and cooperation relationship between Korea and CPTPP countries in the agricultural products trade. This study uses data from Chapters HS1-24 in UN Comtrade from 2012 to 2022, and applies the indices of revealed comparative advantage, export similarity, and trade complementarity to examine the trade dynamics. Furthermore, we use an Autoregressive Integrated Moving Average (ARIMA) model to predict the agricultural products trade complementarity index between Korea and CPTPP countries from 2022 to 2031. Findings - The findings of our analysis reveal that Korea's agricultural products trade competitiveness is weak compared to that of CPTPP countries, and Korea's agricultural products are at a competitive disadvantage. On the whole, the similarity index of agricultural products trade exports between Korea and CPTPP countries is low, the structure of agricultural products export is quite different, and trade competition is relatively moderate. The trade complementarity index between Korea and CPTPP countries is generally high, with strong complementarity and a large space for cooperation and development. The ARIMA model shows that in the next ten years, although the agricultural products trade complementarity index fluctuates, but is generally high, there will still be a complementarity advantage in the future. Originality/value - This study is the first attempt to investigate the competitiveness and complementarity of the agricultural products trade between Korea and CPTPP countries. We also introduce an ARIMA model to forecast and analyze the future agricultural products trade complementarity index. Our study provides new perspectives and solutions for the future development of Korea's agricultural products trade after joining the CPTPP.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.771-780
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• 2021

The study assesses the impact of tariffs on Vietnam's trade in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Research data was conducted between 2001 and 2018 on the official website of the Uncomtrade and the World Bank. This paper uses the gravity model to estimate the relationship between data series and considers the impact of factors on Vietnam's trade with CPTPP countries. The results have proven that tariff reductions have a positive effect on Vietnam's trade. Besides, the trade openness of Vietnam and CPTPP countries has positive impacts on Vietnam's trade. The study also shows that Real Effective Exchange Rate (REER) between Vietnam's and CPTPP countries' currencies has no strong effect on Vietnam's trade. Based on these findings, the article also suggests a number of policies to promote Vietnam's trade in future. In order to support businesses to better utilize opportunities and promote exports to CPTPP countries, the government of Vietnam should: (1) focus on reducing costs and time to participate in the market for production and business investors; (2) improve business investment environment to mobilize resources for production; and (3) continue to organize information campaigns to raise businesses' awareness of how to take advantage of CPTPP preferences.

• Journal of the Korea Institute of Information and Communication Engineering
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• v.22 no.9
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• pp.1271-1276
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• 2018

The CPTPP(Comprehensive and Progressive Agreement for Trans-Pacific Partnership) is a large-scale free trade agreement(FTA) in the Asia-Pacific region involving 11 remaining countries(Japan, Australia, New Zealand, Canada, Mexico, Chile, Peru, Singapore, Vietnam, Malaysia and Brunei) since the withdrawal of the US TPP in January 2017, Although the economic size is smaller than the TPP, the CPTPP has 12.9% of the world GDP and 14.9% of the trade volume, meaning that another mega FTA is born. Local economic experts believe that Vietnam's stable economic growth rate and the CPTPP agreement will have a positive impact on Vietnam's stock market and M&A market in 2018. The experts usually expect it will be come into force in 2018 and not later than 2019. The CPTPP is also very likely to enter into force in 2019 with the aggressive attitude of the member countries, simplifying the entry into force of the agreement.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.5
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• pp.305-311
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• 2022

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is projected to provide several chances for Vietnam's banking industry to expand into the international market. This study examines the influence of foreign ownership on credit risk in Vietnamese commercial banks before the context of participation in the CPTPP. Using a sample of 28 commercial banks between 2009 and 2020, we find that foreign ownership has a negative relationship with bank credit risk. The regression methods used include the least-squares method, fixed-effects model, random effects model, and general least squares method. The research model adds interactive variables, which will help to reflect the role of intermediary factors more accurately such as listing on the stock market, capital ratio to the relationship between foreign ownership and bank credit risk. The test results reveal that increasing the foreign ownership ratio has a bigger impact on reducing credit risk for listed banks and banks with low capital than for other commercial banks. The government should flexibly adjust the foreign ownership ratio according to the capital size and role of each bank so that it can make good use of investment capital from abroad when Vietnam joins the CPTPP.

• Journal of Korea Trade
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• v.23 no.3
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• pp.118-137
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• 2019

Purpose - As global trade disputes intensify and global trade uncertainty increases due to the prevailing trade protectionism all over the world, mega-FTAs such as the RCEP and CPTPP are suggested as strategic trade policy options for export-driven small open economies, such as Korea. This paper aims to provide a comprehensive analysis of Korea's mega-FTA participation and the induced implications for the Korean economy. Design/methodology - We use a multi-region, multi-sector global CGE model, and investigate the different effects of both the US-China and US-EU trade wars on the relative changes in GDP, welfare, and trade under different trade policy regimes; (i) Korea does not participate in any mega-FTA, (ii) Korea participates in the RCEP, and (iii) Korea participates in the CPTPP. Findings - We show, among others, that though industrial effects might be largely varied, the overall enlarging of free trade zones through multilateral mega-FTA participation may contribute significantly to the macroeconomic soundness and stability of Korea, even when global trade protectionism prevails. Under RCEP and CPTPP trade regimes, Korea's GDP may increase even when the global trade environment deteriorates as trade wars occur and intensify between the US and China, or between the US and EU. It is also estimated that RCEP participation increases Korea's GDP, welfare (measured in equivalent variation), and total trade by 1.12%, $1.09 billion, and 2.54%, respectively, while CPTPP participation increases them by 0.19%, $0.92 billion, and 0.13%, respectively. Originality/value - Existing studies usually focus on the direct impacts of mega-FTA participation on macroeconomic variables such as GDP, welfare, and trade, and do not consider the possible buffer effects of a mega-FTA when the global trade environment worsens. In this paper, we analyze and quantify not only the direct impacts of RCEP and CPTPP on the main macroeconomic variables but also the possible buffer effects of the RCEP and CPTPP in the cases of the US-China and US-EU trade wars.

• East Asian Economic Review
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• v.21 no.4
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• pp.343-384
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• 2017

We assess the outcomes for the negotiating parties in the Trans-Pacific Partnership if the remaining eleven parties go ahead with the agreement as negotiated without the United States, as compared to the outcomes under the original twelve-member agreement signed in October 2016. We find that the eleven-party agreement, now renamed as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is a much smaller deal than the twelve-party one, but that some parties do better without the United States in the deal, in particular those in the Western Hemisphere - Canada, Mexico, Chile, and Peru. For the politically relevant medium term, the United States stands to be less well-off outside the TPP than inside. Since provisional deals can be in place for a long time, the results of this study suggest that the eleven parties are better off to implement the CPTPP, leaving aside the controversial governance elements, the implications of which for national interests are unclear and which, in any event, may be substantially affected by parallel bilateral negotiations between individual CPTPP parties and the United States.

• East Asian Economic Review
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• v.25 no.3
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• pp.233-272
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• 2021

The Regional Comprehensive Economic Partnership (RCEP) agreement, signed in November 2020, comes shortly after the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force and the US-China Trade War escalated. We use a computable general equilibrium model to assess the long-term effects of these three developments on income, trade, economic structure, factor returns and employment across the world, and especially in Asia-Pacific countries. The results suggest that RCEP could generate income gains that will be almost twice as large as those of the CPTPP, and that the two agreements together will largely offset the substantial negative effects of the US-China Trade War for the world as a whole. All three policy developments, but especially RCEP, will deepen East Asian production networks and will raise productivity and increase wages and employment in much of East Asia. At the sectoral level, regional trade in non-durable and durable manufactures will experience the most growth.