"CPTPP Demands Greater Openness but Will Help Build a Stable Supply Chain"

Published 19 Jun.2025 07:05(KST)

"Emphasize Quid Pro Quo for Batteries and Semiconductors"
"Korea and Japan Are in Similar Positions"
Strategy for the Global South and Emerging Markets Needed
Need for Regulation of Indirect Exports via Third Countries Raised

As the competition for hegemony between the United States and China intensifies, global supply chains are being reorganized, and the expiration of the U.S. reciprocal tariff suspension approaches, uncertainty in the trade environment is increasing. The U.S. Federal Court of Appeals has decided to suspend the effect of a ruling that nullified the Trump administration's tariff policy during the appeals process. As a result, the new administration now faces the challenge of negotiating new trade policies in an even more complex environment. Trade experts at major law firms advise that, rather than pursuing unilateral investment in the U.S., Korea should adopt a reciprocal 'give-and-take' negotiation strategy.

Reuters Yonhap News

"Emphasize Quid Pro Quo for Batteries and Semiconductors"

Choi Byungil, advisor at Bae, Kim & Lee LLC and former Korean representative for the WTO Basic Telecommunications Negotiations, stated at the "Trade Strategy Innovation Hub Conference" held on June 12, "Since Korea's battery cell, semiconductor, and automobile companies are contributing to U.S. economic security, Korea should establish a 'quid pro quo' structure, such as expanding infrastructure in return." This strategy is also known to have been effective for China in its negotiations with the United States. Choi emphasized, "To move beyond export-oriented manufacturing, it is necessary to rapidly expand Korea's economic strategic space around markets, resources, and technology. Trade should be approached not merely as industrial or diplomatic trade, but at the level of national management, so that the capabilities of a competent bureaucratic organization can be fully leveraged."

"Korea and Japan Are in Similar Positions"

Discussions about joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are also drawing renewed attention. Yeo Han-koo, the newly appointed Minister for Trade Negotiations, recently stated in an interview with Japanese media, "Korea and Japan are in similar positions regarding the Trump administration's tariff measures and their relationships with China," adding, "I hope that discussions on Korea's accession to the CPTPP will be positively considered." Law firm Shin & Kim analyzed that Korea's push to join the CPTPP could gain renewed momentum, citing the weakening regulatory power of the World Trade Organization (WTO) and the completion of free trade agreements (FTAs) with major countries as background factors. Shin & Kim noted, "While the CPTPP requires a high level of trade norms and market openness, it can contribute to building a stable, rule-based supply chain in the rapidly changing trade environment. The European Union (EU) is also reportedly considering CPTPP membership internally, so close attention should be paid to the new administration's future discussions."

Strategy for the Global South and Emerging Markets Needed

Alongside multilateral trade agreements, pioneering new markets to diversify supply chains has emerged as a key task. Law firm Jipyong suggested expanding cooperation with the 'Global South,' including ASEAN, Central and South America, and Africa, as well as pursuing trade negotiations with emerging markets such as Malaysia, Thailand, and Mongolia. These regions are also areas where China's influence is steadily growing. Jipyong stated, "The Global South is emerging as a new economic bloc based on high economic growth rates, young populations, and abundant resources. To respond to the reorganization of the international order centered on these countries, Korea should implement tailored foreign policies by region and sector, including infrastructure, digital, and development assistance."

Need for Regulation of Indirect Exports via Third Countries Raised

Recently, there has been an increase in cases where Chinese companies, in order to circumvent high U.S. tariffs, add only minor processing in Korea and label the origin as Korean for 'indirect exports.' As a result, some analysts predict that sanctions against such unfair trade practices will be strengthened. Law firm Lee & Ko advised, "It is essential to actively present corporate perspectives during the legislative and policy processes related to economic security and to establish a compliance management system in preparation for changes to relevant laws and regulations."