Analysis of the Impact of CPTPP Membership on the Korean Economy

Abstract

Purpose - As of 2022, Korea’s dependence on trade was 75%. Korea must join the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) in order to keep pace with US-led trade standards in the future. This paper empirically investigated the impacts of Korea’s participation in the CPTPP on the economy. Design/Methodology/Approach - Using the World Input-Output Database and regression analysis, Korea’s CPTPP membership expands trade with 11 countries, including Japan, contributing greatly to the growth of the Korean economy. Findings - Our main findings can be summarized as follows. In 2022, exports and imports to Japan were $30.6 billion and $54.7 billion, respectively. If Korea joins the CPTPP, the economic effect will increase GDP by about 1.7% every year, and is expected to be more than $40.3 billion in 2025. The CPTPP has a great impact on the Korean economy by expanding trade with 11 countries, including Japan. Although Korea already has FTAs with 9 TPP member countries, it has been found that Korea’s GDP expands through additional tariff and non-tariff trade expansion by joining the CPTPP. Research Implications - Existing studies focus on the benefits of Korea on joining the CPTPP. This paper attempts to firstly evaluate the impact of joining the TPP on the Korean economy via analysis of the World Input-Output Database (WIOD).