Sang-Chul Park, Professor of Korea Polytechnic University
Professor Park Sang-Chul passed the qualification examination for political science in Germany in November 2002 (official professor qualification), and successfully completed the lecturer evaluation for economics in Sweden in September 2004 (Swedish qualification). Currently, he holds a full professorship at the Graduate School of Knowledge Technology and Energy of Korea Polytechnic University, as well as an adjunct professorship at the Center for Science-Based Entrepreneurship of the Korea Advanced Institute of Science and Technology (KAIST). He also serves as a private lecturer at the Justus Liebig University in Giessen, Germany, and a visiting professor at the University of Gothenburg in Sweden. His research interests encompass industrial policy and regional development, as well as studies in innovation systems, with a particular focus on science parks and innovation clusters. Currently, he has expanded his research portfolio to include energy policy, sustainable development strategies, high-tech enterprises, and international business and trade.
On March 31, 2023, the United Kingdom successfully brokered an agreement with its Indo-Pacific counterparts to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) during a virtual ministerial meeting. Consequently, the SPCIS reached out to Professor Park Sang-cheol to inquire about his perspectives on the UK's accession to the CPTPP and the future trajectory of the country's international trade developments following this significant move.
UK's Strategic Shift: Navigating the Economic and Political Implications of CPTPP Membership Post-Brexit
The U.K. withdraw her membership from the European Union (EU) officially on Jan. 1. 2021. Since then, the U.K. and the EU have closed the EU-UK Trade Cooperation Agreement (TCA) that implies higher costs for trade of both parties. In fact, it has affected to the U.K. more seriously than to the EU due to the difference of economic structure and size. It is inevitable for the U.K. to experience a high inflation since then due to her service-oriented, particularly financial service-oriented economic structure while the EU as the second largest economic bloc in the world has maintained its economy well with the balanced industrial structure between manufacturing and service sectors. In order to overcome instability of the U.K. in terms of economy, defense, politics etc. the Boris Johnson government launch the Global Britain Strategy in 2021 focusing on its long-term development until 2030.
Under such circumstances, the U.K. has to look after other trade partners at a global scale in order to minimize the external shock of her withdrawal from the EU. The U.K.’s economic integration with the member nations of the Five Eyes have been deepen enough since the Second World War. Logically, therefore, the U.K. is keen to access to the market of the Asia Pacific region, which is regarded as the economic powerhouse next decades and applied for the membership of the CPTPP on Feb. 1, 2021 right after her withdrawal from the EU. In the CPTPP, Australia, Canada, Japan, and New Zealand are already members. Moreover, four ASEAN member nations such as Brunei, Malaysia, Singapore, and Vietnam have participated in the Mega FTA. It is a perfect structure for the U.K. to get supports from these member nations as allies and partners to join the CPTPP.
The next step for the U.K. will be to strengthen its trade partnership with the member nations first of all in order to maximize its economic benefits. At the same time, the U.K. will focus on its economic security and national interests by intensifying its tools of the QUAD (Quadrilateral Security Dialogue) and the AUKUS established in 2022. As a result, the U.K. can be involved in the Asia-Pacific and Indo-Pacific regions not only for economic interests, but also for military and political interests stronger than the EU.
The U.K. government decided on participating in the CPTPP after the cost and benefit analysis. Certainly, however, its membership can face some risks and challenges. First of all, it will face high competition from other member countries particularly in the agriculture sector from Australia, Chile, Mexico, Malaysia, New Zealand, and Vietnam as well as the manufacturing sector from Japan and Singapore. The rules of the CPTPP including provisions on IPRs, labor standards, environmental protection, and state-owned enterprises (SOE) cannot be major hurdles for the U.K. because she fulfils most of requirements. However, the logistics to deal with the long-distance trade can increase the costs and reduce the margins of companies compared to the internal trade within the EU area. Additionally, reducing carbon emission through the long distance-based trade can be a great challenge to meet the target for carbon neutrality by 2050.
What’s more, the U.K.’s accession to the CPTPP does not affect the Chinese application for the CPTPP directly. Certainly, however, it can influence the China’s entry indirectly strong enough because all 12 member nations have to accept the new member with unanimous approval. Therefore, it is possible for the U.K. to use her membership as a check and control mechanism toward the China’s application along with Japan in order to open Chinese market more than now.
The U.K.’s accession to the CPTPP will increase difficulties to China’s application because China’s accession to the CPTPP will function as de facto China-UK FTA that will cause high competition for the U.K.’s manufacturing sector comprehensively. Therefore, the U.K. will try to avoid the possibility of China’s entry as much as possible. Furthermore, the U.K. and other advanced economies in the CPTPP will monitor the entry process of China harder than ever whether or not China can comply with the rules of the CPTPP including provisions particularly on IPRs, labor standards, environmental protection, and SOE. These regulatory targets are the highest firewall of the CPTPP that China can meet because Chinese current economic and industrial structures cannot fulfil all requirements of the regulatory.
Contact: Long Yixun
Interview: Ye Jiewen
Translate: Chao Wei