"Next Year’s Mega FTA and Climate Change to Be Key Issues"… KCCI Holds Global Trade Environment Seminar

[Asia Economy Reporter Ki-min Lee] Trade experts have predicted that mega FTAs, digital transformation, climate change, environment, and labor issues will emerge as key trade issues next year.

The Korea Chamber of Commerce and Industry (KCCI), together with the Ministry of Foreign Affairs, Ministry of Trade, Industry and Energy, and the European Chamber of Commerce in Korea, held a 2021 Global Trade Environment Outlook Seminar on the 9th under the theme "Trade Policy Directions in the Post-Corona Era."

The seminar saw the participation of ambassadors to Korea and economic counselors from eight countries including Australia, New Zealand, India, and Japan, as well as Dirk LUKAT, Chairman of the European Chamber of Commerce in Korea; Yoon-Joo Ko, Director General of the North American Affairs Bureau at the Ministry of Foreign Affairs; Byung-Il Choi, Secretary General of the Korea Foundation for Advanced Studies; Seok-Young Choi, Advisor at the law firm Kwangjang (former Ambassador to Geneva); Deok-Geun Ahn, Professor at Seoul National University Graduate School of International Studies; and numerous government, legal, academic, and research institution trade experts from abroad.

Woo Tae-Hee, Executive Vice Chairman of KCCI, said in his opening remarks, "Next year, issues such as environment, labor, climate change, and digital transformation are expected to become more important trade issues than traditional trade agendas like market opening." He added, "Governments should establish clear fundamental principles regarding anticipated trade issues, and companies must conduct thorough monitoring and risk management." Chairman Lukat emphasized in his congratulatory speech, "This seminar is not only timely but also a very good opportunity to explore challenges and opportunities in the future international trade and investment environment and responses in the post-Corona era."

The seminar was divided into sessions discussing and forecasting new trends in global trade, focusing on topics such as the trade policy direction of the new U.S. administration and U.S.-China relations outlook, reform tasks of the World Trade Organization (WTO) in the era of the new Secretary-General, and directions and tasks of mega FTAs.

Shin Jeong-Hoon, a lawyer at Kim & Chang law firm and presenter of the first session, stated, "Labor and environmental issues, especially climate change, are expected to become trade issues and agenda items for FTAs or WTO reforms under the new U.S. administration." He added, "Issues such as minimum wage stipulated in the United States-Mexico-Canada Agreement (USMCA) and currency matters will also be brought to the table." Regarding U.S.-China relations, Shin said, "There is a coexistence of cooperation, compromise, competition, confrontation, and conflict depending on issues and timing," and predicted, "There will be no major changes under the Biden administration. However, areas that were previously competitive or confrontational in trade may shift toward cooperation and compromise."

In the second session, Cheol Jung, Senior Research Fellow at the Korea Institute for International Economic Policy, forecasted in his presentation, "With President-elect Biden emphasizing alliances and principles and signaling the restoration of international norms and order, expectations for WTO reform are rising. It is important at this point to set and discuss the tasks of the next WTO Secretary-General for the recovery of the multilateral trading system and global trade development."

Senior Research Fellow Jung continued, "The top priority for the next WTO Secretary-General is restoring trust, and during the WTO reform process, it is necessary to establish complementary relationships between the WTO and mega FTAs such as the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), USMCA, and other plurilateral agreements." He emphasized, "Considering 21st-century trade issues such as digital transformation, geopolitical factors, inclusive growth, and sustainability, and the need for trade norms, there are limitations in accommodating these within the 20th-century trade system. Therefore, the new Secretary-General should strive to establish a 21st-century trade and commercial system."

The third session presenter, Soo-Dong Kim, Senior Research Fellow at the Korea Institute for Industrial Economics and Trade, predicted, "Member countries participating in the CPTPP and RCEP are expected to gain economic benefits, while non-members are likely to suffer economic losses due to trade diversion." He added, "If the U.S. and China join the CPTPP, the impact of the CPTPP on the global economy will be enormous."

He further stated, "The Biden administration will seriously consider rejoining the CPTPP to regain economic leadership in the Asia-Pacific region but will demand renegotiations in areas such as labor, environment, and public health." Kim forecasted, "China is actively and openly supportive of joining the CPTPP, but provisions related to intellectual property rights, data transfer, environmental protection, state-owned enterprise reforms, and the 'non-market economy' clause in the USMCA will act as obstacles." He suggested, "Considering factors such as the Korea-U.S. alliance, U.S.-China conflicts, the de facto Korea-Japan FTA, and relatively limited economic benefits, Korea's participation in the CPTPP should be decided in a way that maximizes national interests."

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