South Korea’s president concedes the Pacific trade pact will not be joined on his watch, tells farmers he will not force losses on the powerless, and floats an export levy on the industries that would have gained
SEOUL, October 26, 2026 – President Lee Jae Myung said on Monday that South Korea is unlikely to complete accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership during his term, the clearest signal yet that the country’s decade long flirtation with the bloc has stalled again.
Speaking at a town hall at Cheong Wa Dae attended by roughly 110 representatives of farming, fishing, forestry and livestock interests, Lee said accession requires unanimous consent and that the probability of completion within his presidency is low. “We need to obtain permission from all 12 member countries,” he said, according to Reuters. “The possibility that it will not be completed within my term is far higher.”
Lee’s single five year term runs to June 2030. The remark therefore pushes any realistic Korean entry into the next administration, and it does so after a procedural deadline has already passed that would have allowed Seoul to declare its intent at the bloc’s ministerial meeting in Vietnam from November 23 to 27.
It was the first time since 2018 that a sitting Korean president had met a large group of farmers and fishers in person, and the setting was the message. The obstacle to Korean membership has never been the economics of the manufacturing sector. It has been the politics of the primary sector, and Lee spent Monday acknowledging that rather than arguing with it.
The numbers on both sides
The Ministry of Trade, Industry and Energy published its impact assessment on September 28, and the figures it produced explain why the decision has been so hard to make and so easy to postpone.
Accession would raise real gross domestic product by 0.38 percent over ten years. Manufacturing output would gain 6.3 to 6.7 trillion won, roughly 4.4 to 5.0 billion dollars a year, averaged over the first 15 years after entry into force.
Against that, combined agriculture, forestry and fisheries output would fall by roughly 850 billion won a year over the same 15 year horizon: agriculture down about 710 billion won, equivalent to some 536 million dollars, fisheries down 81.7 billion won, forestry down 60.6 billion won.
In aggregate the trade is overwhelmingly favourable. Manufacturing gains outweigh primary sector losses by something close to eight to one. That is the standard shape of a liberalisation calculation, and it is also the standard reason such calculations fail politically: the gains are diffuse and arrive as slightly better margins across a large export base, while the losses are concentrated on identifiable households in identifiable districts.
Lee put the dilemma in terms his audience would recognise. “We cannot live on semiconductors alone, but neither can we live on agriculture alone,” he said, in the Korea Times rendering of his remarks. He added, in the Korea Herald’s account: “We must no longer force losses and suffering on people simply because they lack power or are small in number.”
The export levy
The genuinely new element on Monday was a financing proposal. Lee suggested taking a share of the gains from liberalisation, from the beneficiary industries and companies themselves, through an export levy that would be redirected to the primary sector.
“If you benefit at the cost of someone else’s sacrifice, you should at least bear a minimum burden,” he said, in the Seoul Economic Daily’s translation. He had floated a similar idea on social media in September.
The proposal is unusual, and its design would raise questions. A levy on exports is a trade measure in its own right, with implications under World Trade Organization rules depending on how it is structured, which products it touches and whether it functions as a tax on export performance or as a general corporate charge. Korea has no obvious precedent for it. Neither, for that matter, does any major exporting economy, which is why the idea has attracted attention well beyond the farm constituency it was addressed to.
The reason Lee reached for a new instrument is instructive, and it is a cautionary tale for any government promising compensation alongside a trade agreement.
After the Korea China free trade agreement of 2015, Seoul pledged a one trillion won cooperation fund for rural and fishing communities, to be financed largely through voluntary corporate contributions. Only about 325.5 billion won was ever raised, leaving a shortfall of roughly 700 billion won, some 529 million dollars. The government now says it will cover the gap.
Farm groups have not forgotten. A voluntary fund that delivered a third of its promise is the strongest argument available against accepting another compensation package on trust, and it is the reason Lee is proposing a mandatory mechanism rather than an appeal to corporate goodwill.
The other grievances
Two further strands ran through the town hall.
The first is the level of direct support. Public interest direct payments run at about 5.19 million won per farm household per year, a figure Lee described as quite low by comparison with Japan, Europe and the United States, and which he pledged to raise. The agriculture ministry commands 2.8 percent of the national budget against farm groups’ demand for 5 percent, on a total agriculture, forestry and fisheries budget of 30.7 trillion won.
The second is Japanese seafood. A participant warned that unrestricted imports of Japanese seafood would shake the aquaculture industry from its foundation, and Lee acknowledged the point as a major practical obstacle. Korea maintains import restrictions on seafood from the Fukushima region, and Japan is a founding CPTPP member with a longstanding interest in seeing them removed. That is not a side issue to accession. It is a bilateral dispute that sits directly inside the accession file, and it was one of the reasons Korea’s earlier attempt under President Moon Jae-in in 2021 never produced an application.
A government divided on timing
Korea’s trade ministry has not accepted the president’s framing.
Industry Minister Kim Jung-kwan told a National Assembly trade committee audit on October 22: “As the minister responsible for trade, I will make sure we join CPTPP.” The Seoul Economic Daily reported him saying the president clearly has the will to join. Four days later the president said completion within his term is unlikely.
Both statements can be true. A government can hold an intention without a timetable. But the gap between them is wide enough to be read as a live internal argument, and trading partners will read it that way.
Lee had already instructed officials not to apply this year, a decision taken after a cabinet discussion in early October. For Korea to have been considered at the November ministerial, a public hearing plan had to be published in the official gazette by mid October. It was not, which is why the November meeting is now a matter of attendance rather than application.
Why it matters outside Korea
The CPTPP comprises 12 members including Japan, the United Kingdom, Canada, Australia, Mexico and Vietnam, accounting for roughly 15 percent of global gross domestic product. It is the principal surviving vehicle for deep market access liberalisation in the Asia Pacific at a time when most trade policy energy worldwide is flowing in the opposite direction, toward safeguards, quotas and carbon border measures.
Korea’s absence from it has three consequences for traders.
First, Korean exporters continue to face tariff schedules in CPTPP markets that are being progressively eliminated for competitors inside the bloc. The effect is cumulative and compounds each year the gap persists, particularly against Japanese competitors in third markets such as Mexico, Canada and Vietnam where both countries sell similar industrial goods.
Second, rules of origin inside the CPTPP allow cumulation among members. A Korean component shipped into a Vietnamese assembly operation does not count toward originating content for CPTPP preferential access the way a Japanese or Malaysian component does. In supply chains that have been actively reorganising for three years, that is a steady and quiet disadvantage for Korean parts suppliers.
Third, the United Kingdom’s accession, completed in roughly four years from application to entry into force, established that the process is long. A Korean application filed by a successor administration in 2030 would not deliver market access before the middle of the decade that follows.
Reactions
Farm and fisheries organisations launched a task force in September specifically to oppose entry, drawing in representatives of 76 local civic groups. Kang Jeong-hyun of the Korean Rural Leaders’ Central Association said at the launch that joining the pact would expose Korean producers to aggressive trade conditions from member countries. Noh Man-ho, chief executive of the Korea Federation of Comprehensive Agricultural Organizations, said average annual income among his members is merely 10 million won and that young farmers are leaving. Kim Hyang-suk, chairwoman of the Women Advanced Farmers’ Federation, said that without female farmers there is no future for sustainable agriculture.
The task force has pointed to Japanese experience, citing an increase of roughly 220 billion won a year in Japanese fresh produce imports since Tokyo joined.
Presidential spokesperson Kang Yu-jung said in early October that Lee had asked ministries to continue consulting farmers and fishers rather than setting a deadline, and that trade policy is directly connected to people’s lives.
No named reaction from Korean exporters, business federations or chambers of commerce was available on Monday’s remarks. No CPTPP member government had commented. One industry official, speaking to the Seoul Economic Daily on October 22 and not named, said what mattered was that the government express its intent to pursue membership consistently.
A separate domestic dispute over a nationwide farmland survey has added to the friction, with Agriculture Minister Song Mi-ryung saying the government will seek a special law by the end of 2026 separating customary breaches of farmland rules from speculation.
What accession would have changed
For exporters outside Korea, the practical question is what the delay preserves and what it forecloses.
The CPTPP’s tariff schedules are largely phased to zero among members, and Korea’s absence means Korean goods continue to enter those markets on most favoured nation terms or on whatever bilateral preference exists. Korea has bilateral agreements with a number of CPTPP members, including Australia, Canada, Chile, Peru, Singapore, Vietnam and the bloc’s ASEAN members, which blunts the headline effect. The gap is concentrated in Japan and Mexico, where Korea’s bilateral coverage is thinnest and where Korean exporters compete directly with firms inside the bloc.
Mexico is the sharper case. It is a significant market for Korean autos, auto parts, steel and consumer electronics, and Korean producers there face duties that Japanese competitors have progressively shed through CPTPP preferences. Korean attempts at a bilateral agreement with Mexico have not progressed, which makes CPTPP the only realistic route to parity.
Japan is more complicated. Korea and Japan have no bilateral free trade agreement, and accession would have created preferential access in both directions for the first time. That prospect is as unwelcome to parts of Korean agriculture and small manufacturing as it is attractive to Korean exporters, and it is the single factor most responsible for the politics that stalled the application.
The cumulation question
The less visible cost sits in rules of origin.
CPTPP members may cumulate originating content among themselves, so that inputs from any member count toward the regional value content required for preferential treatment. A Vietnamese assembler shipping to Canada can count Japanese, Malaysian or Australian components toward origin. Korean components do not count.
For Korean parts makers supplying assembly operations across Southeast Asia, that is a standing disadvantage that compounds with every sourcing decision taken on the basis of origin qualification. It does not show up in export statistics as a tariff. It shows up as a lost tender.
Supply chains in the region have been actively reorganising since 2023 as manufacturers diversify production out of China, and origin qualification has become one of the primary criteria in supplier selection. Each year Korea remains outside the bloc, a further tranche of those sourcing decisions is taken without Korean content in it, and sourcing decisions in automotive and electronics are sticky on a five to seven year cycle.
Sector by sector exposure
The impact assessment’s aggregate numbers conceal a wide spread.
On the gaining side, the clearest beneficiaries would have been automobiles and parts, machinery, petrochemicals, steel and consumer electronics, all sectors where Korea has scale, competes with Japanese firms in third markets, and faces residual duties in Mexico, Canada and Japan.
On the losing side, the exposure is narrower than the political temperature suggests but concentrated in politically organised segments. Fruit and vegetable growers face Japanese, Chilean, Peruvian, Australian and New Zealand competition. Livestock producers face Australian, Canadian and Mexican beef and pork. Fisheries face Japanese and Vietnamese product. Forestry faces Canadian, Chilean and New Zealand timber.
The 710 billion won annual agricultural loss estimate sits against a sector whose total output is many times that figure, so the proportional effect is modest in aggregate. It is not modest for the specific producers in the specific product lines concerned, and Korean farm politics has never operated on aggregates.
Korea’s alternative tracks
Seoul is not without options while CPTPP remains closed, and the alternatives explain why the delay carries less cost than it would have a decade ago.
Korea is a member of the Regional Comprehensive Economic Partnership, which covers the same Asian markets with shallower liberalisation but which does provide cumulation among its members, including Japan. RCEP’s rules of origin are less demanding than CPTPP’s and its tariff phase-outs are slower, but for a parts maker supplying a Vietnamese assembler, RCEP cumulation addresses part of the problem.
Korea also has an extensive bilateral network, including agreements with the European Union, the United States, China, India, the ASEAN bloc and most of Latin America’s larger economies. On coverage of global gross domestic product, Korea’s bilateral architecture is among the most comprehensive of any economy.
What the bilateral network does not provide is the deep rulemaking on digital trade, state owned enterprises, government procurement and investment that CPTPP members have agreed among themselves. That is the part of the pact Korean trade officials most want, and it is the part that cannot be replicated bilaterally.
The political arithmetic
Lee’s position is coherent on its own terms, and reading it as simple capitulation to farm lobbying misses the sequencing.
He has not withdrawn the policy. He has said it will not be completed on his watch, which allows the government to continue preparatory work, maintain the trade ministry’s stated intention, and build a compensation framework, without having to spend political capital on an application in a year when the farmland survey dispute has already brought farmers onto the streets.
The export levy fits that reading. A compensation mechanism with a mandatory funding source is the precondition for farm sector acquiescence, given how badly the 2015 voluntary fund performed. Designing one takes years. Announcing the intention now, and the application later, puts the pieces in a defensible order even if it loses time.
The risk is that the order never completes. Korean trade policy has approached CPTPP twice, in 2021 and 2026, and retreated twice at the same obstacle. A third administration arriving in 2030 to find the compensation framework half built and the farm constituency no more reconciled would face the identical choice. Each cycle also raises the entry price: CPTPP members have accumulated further commitments among themselves, and a late entrant negotiates against a thicker acquis.
What importers and exporters should take from it
For firms trading with Korea, nothing changes in the near term. Korean tariff schedules, rules of origin and preferential arrangements continue as they are, and the extensive bilateral network remains the operative framework.
For firms sourcing within the CPTPP region, the planning point is that Korean content will not qualify for cumulation for the foreseeable future, and supplier qualification exercises should be run on that assumption rather than on an expectation of near term accession.
For agricultural exporters in CPTPP member states, Korea remains a market governed by bilateral terms and by sensitive product carve outs, and the political signal from Monday is that those carve outs are being reinforced rather than relaxed.
What to watch
The first marker is the Vietnam ministerial from November 23 to 27. Korea will attend without an application. Whether the bloc’s existing members use the meeting to signal openness to a later Korean bid, or simply proceed with other business, will indicate how much of the delay is Korean politics and how much is accumulating indifference in the bloc.
The second is the export levy. If the finance ministry begins serious design work, the proposal becomes a trade policy question rather than a town hall gesture, and Korea’s trading partners will want to know its base, its rate and whether it discriminates between destinations.
The third is the compensation package. The 700 billion won shortfall from the 2015 fund is now a government commitment rather than a corporate aspiration. Delivering it would materially change the credibility of any future offer to the farm sector, and failing to deliver it would end the argument for a generation.