The South Korean government is reviewing contributions to the Rural Development Cooperation Fund and is moving to join a new trade consultative body, leading to speculation that efforts to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are intensifying. Concerns are growing within the agricultural sector about the potential negative impacts of market opening.
According to relevant authorities on July 19, the government's actions regarding the Rural Development Cooperation Fund and joining the trade consultative body are being viewed by the agricultural community as preliminary steps toward CPTPP membership, which is a multilateral free trade agreement involving countries in the Asia-Pacific region.
Earlier, President Lee Jae-myung mentioned during a report from the Ministry of Agriculture, Food and Rural Affairs on July 16, "Did we not create a 1 trillion won fund for cooperation following the Korea-China FTA?" He added, "The target amount of 1 trillion won is quite small, and currently, only about 300 billion won has been raised."
He continued, "Since we promised farmers a 1 trillion won compensation, the government should also take responsibility. This is a matter of trust," suggesting that if there is a shortfall of about 700 billion won, the government could explore options to cover it given the current favorable tax revenue situation. The possibility of using increased tax revenue from the special rural tax due to a strong stock market in the first half of the year is being discussed.
While the expansion of the fund for rural development appears beneficial for farmers, the agricultural sector remains cautious due to the government's recent actions. On July 17, the government officially announced its membership in the Future Investment and Trade Partnership (FIT-P), a consultative body focused on free trade among middle powers.
The concern is that six of the FIT-P member countries are already CPTPP members. Since existing members must agree to new members, joining FIT-P is seen as a favorable step toward CPTPP membership. Some view the FIT-P membership as a foundation for joining the CPTPP, while others interpret the fund contributions as an effort to quell farmers' dissatisfaction.
The agricultural sector's apprehension about CPTPP membership stems from the significantly higher level of market opening it demands compared to existing FTAs. The expected high tariff elimination rates and the difficulty in establishing exception clauses are concerning. Additionally, the capacity to respond to sanitary and phytosanitary measures, which have been used to restrict agricultural imports, may weaken under the CPTPP framework.
Joining the CPTPP is expected to adversely affect rice, apple, and livestock farmers. Countries like Australia and Vietnam may demand increased exports of their rice to South Korea, and there is a possibility of importing apples from New Zealand and Japan. There are also forecasts that beef from Australia and Mexico could enter South Korea at lower prices.
As a result, voices of concern are growing among agricultural organizations and farmers. Norman Ho, the permanent representative of the Korean Federation of Agricultural Cooperatives, stated, "CPTPP is not just a trade agreement; it directly relates to the foundation of domestic agriculture and food security. The government should halt its membership push and develop effective measures to stabilize agricultural prices and alleviate production costs."
* This article has been translated by AI.
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