Search

This paper analyzes the impact of the Chile-South Korea Free Trade Agreement (CKFTA) over the bilateral extensive and intensive margins of trade. Using disaggregated product-level data for the period 1996-2017, the paper tests the impact of CKFTA on bilateral flows, as well as differentiate these effects between intensive and extensive margins at the product level. To estimate, a Poisson-Pseudo Maximum Likelihood model is proposed. It is found that the CKFTA had a positive effect over bilateral trade flows, and although new products were added to the bilateral export basket (extensive margin), the impact is stronger on goods already traded (intensive margin). Moreover, the paper concludes that this effect is stronger for Chilean exports. [ABSTRACT FROM AUTHOR]

With the UK‐Korea‐EU Free Trade Agreement (FTA) and the UK‐Japan‐EU FTA, the gross domestic products of the UK, Korea, Japan, and the EU will increase. The UK's exports to Korea and Japan, and Korea's exports to the UK, Japan, and the EU will increase in some manufacturing sectors, particularly the automotive sector. Likewise, Japan's manufacturing exports to the UK and the EU will grow. However, UK and Japanese exports to the EU and Korea, respectively, will decline in this sector. There will be positive welfare effects on the UK, Korea, and Japan, but negative welfare effects on the EU, China, and the rest of the world (ROW). While UK imports from Korea and Japan and Korean imports from the UK and the EU will both increase and have mixed trade creation and diversion effects, UK imports from the EU will decrease in the manufacturing sectors. Korea's imports from Japan will decline, but Japan's imports from the UK, Korea, and the EU will increase due to trade creation and diversion effects. China's imports from Korea and Japan will decline, whereas China's imports from the UK and the EU will increase. EU imports from Korea and Japan will increase due to trade creation and diversion effects, but EU imports from the UK, China, and the ROW will decline in most manufacturing sectors. [ABSTRACT FROM AUTHOR]

This study aims to reveal the actual effect of FTAs on South Korea's foreign trade volumes of main export and import products separately. The econometric approach of our study follows the gravity model with a panel dataset of 47 countries that have FTA with South Korea for the years between 2001-2018 by using 2-digit HS (Harmonized System) classification for main export and import goods. The study reveals that even though signing the FTA affects positively the trade volume of South Korea and partner countries, the export of South Korea i s affected positively only f or t he b ase metals & articles products while the import of South Korea increases for mineral products, chemical or allied industries products and machinery & mechanical appliances after the FTAs entered into force. Our findings contribute to the literature by ascertaining a new estimation model and original empirical results for South Korean trade policy makers. [ABSTRACT FROM AUTHOR]

Although sanctions targeting political regimes receive the most media attention, the EU can also sanction states for labour rights violations through its trade policy. Although in practice such sanctions are applied only in extreme cases, the possibility of suspending trade preferences increases the EU's leverage. In modern trade agreements, the EU incorporates Trade and Sustainable Development (TSD) chapters for labour and environmental matters. However, trade sanctions for non-compliance with this chapter are absent. Instead, a dedicated dispute settlement arrangement exists, leading to recommendations by a panel of experts. In 2019 the EU launched proceedings against South Korea for failing to uphold commitments to ratify and implement International Labour Organisation core conventions regarding trade unions under the 2011 EU-Korea Trade Agreement. In 2021, the panel of experts sided with the EU's interpretation of commitments under the TSD chapter. This initial case represents the EU's intention to focus on the implementation of TSD chapters. Using data from official documents, this article process-traces the dispute with Korea. It argues that the outcome of the case, and Korea's ratification of fundamental International Labour Organisation conventions in 2021, demonstrate the potential of the TSD chapter, when forcefully enforced, to partially redress the weak sanctioning capacity in TSD chapters. It also uncovers important caveats regarding state capacity and alignment with government objectives as conditioning the effectiveness of TSD chapters' non-legally binding sanctioning mechanisms. [ABSTRACT FROM AUTHOR]

In this paper, we use a multinomial logit model and identify the important factors in determining the staging categories of Korean tariff concessions in the Korea–China free trade agreement (FTA). We find that most-favored-nation (MFN) tariff rates and whether a product is agricultural or not are the most influential determinants of tariff concessions in the FTA. The results also show that the effects of the determinants are heterogeneous over industries: the influence of the Chinese import share is more pronounced for agricultural products than for manufactured goods, while that of MFN tariffs is less prominent for agricultural products. The latter result implies that quite a few Korean agricultural products are heavily protected in the FTA, despite their relatively low MFN rates. [ABSTRACT FROM AUTHOR]

Cross-regional free trade agreements (FTAs) have flourished in East Asia since the late 1990s. Japan and Korea were at the forefront of this trend. Nevertheless, most policymakers' preferences orbited around region-oriented FTAs out of reluctance to make a sudden policy shift away from their conventional emphasis on World Trade Organization-based multilateral negotiations. The trend continued in Japan throughout the 2000s. In contrast, Korea took a sharp turn toward a cross-regional strategy in 2003. By the mid-2010s, this had created a significant gap in the two countries' overall FTA partner choices. What caused policymakers' ideas in the two countries to diverge from their initial focus on region-oriented FTAs? This paper focuses on the conditions that enabled policymakers' ideas to explain the divergence by developing the contextual‒dynamic framework of FTA policies. At the dynamic level, individuals are more likely to emerge with new ideas when their expertise comes from outside the decision-making body, accompanied by their social qualities and power. Contextual conditions should also be met: the trade policy environment should reciprocate agent-level qualities to create a supportive atmosphere for policy change. [ABSTRACT FROM AUTHOR]

The Republic of Korea (South Korea) is one of the typical, newly-industrialised economies of Asia (ANIEs) that has undergone spectacular economic and social development over the last half century. Since the 1960s it has developed gradually and has become one of the most advanced nations of the world. As a result of the stalemate of the Doha-round, and of the financial and economic crisis in 2008-2009, a new trend seems to have emerged in the field of trade liberalization in the world. Instead of striving for a comprehensive, multilateral framework, a growing number of "new generation" free trade agreements have been emerging that are concluded on a bilateral level or among a few countries. The Republic of Korea joined this trend in 2008. Since then it has concluded a number of FTAs with Asian, American, European and other partners including the USA and the European Union, and it still has a number of draft agreements under negotiation. The EU-Korea FTA (KOREU) entered into force on 1 July 2011, marking a new' era in EU-Korea trade relations. It is the most comprehensive free trade agreement ever concluded by the EU, and the first with a partner country in Asia. Since it came into force, import duties have been eliminated on nearly all products (98.7% of duties within five years), which resulted in a far-reaching trade liberalization in services as well. Since 2011 the European Union's exports to Korea have been growing, and the former trade deficit in the EU-Korea relations has shifted to European surplus in the balance of trade. This can be seen as an advantage for the EU, but it also reflects the vulnerability of the Korean economy's competitiveness. [ABSTRACT FROM AUTHOR]

Domestic, US and Australian beef, which are differentiated by country of origin, are sold in Korea. In this differentiated product market, tariff reductions through Free Trade Agreements (FTAs) are expected to strengthen the competitiveness of imported beef and, therefore, to mitigate the effects arising from the market power of domestic marketers. The present study develops a simulation model that evaluates this mitigating effect by explicitly reflecting the market structure that domestic beef marketers constitute. The simulation results indicate that the farm-retail marketing margin would decrease by 10.59% or 6.79% due to the Korea–US and Korea–Australia FTAs, respectively, if domestic beef marketers formed a cartel or an oligopoly market (i.e. the degree of market power is 0.5), while the marketing margin under a competitive market scenario is simulated to have no change. The value of beef production would decrease by 1009 million dollars if the marketers form a cartel and hence exercise monopoly power. The FTAs are simulated to reduce the value of beef production by 564 million dollars under the competitive market scenario. [ABSTRACT FROM AUTHOR]

In this paper, we examine the role of export promotion agencies ( EPAs) in promoting exports from Japan and Korea. Looking at two home countries enables us to tackle endogeneity issues by controlling for both country-pair time-invariant characteristics and importing-country time-varying characteristics. Our empirical results indicate that EPA has a positive and significant effect on exports even when we control for endogeneity. However, the size of the effect becomes substantially smaller, implying the importance of addressing endogeneity in accurately measuring the impact of EPA on exports. In addition, we find that EPA's (marginal) effects are larger in exporting to low-income trade partners than in exporting to high-income trade partners. [ABSTRACT FROM AUTHOR]

The Korean passenger car market is dominated by a few domestic producers. In this paper, we investigate whether this market structure is the result of import tariffs and taxes that penalize foreign manufacturers. Our counterfactual simulation under two FTA scenarios shows that the market shares of imported and domestic cars show minimal adjustments, suggesting that import tariffs and taxes may not explain the lack of penetration of import cars in Korea. We predict changes in consumer surplus and discuss the policy implications of our findings. [ABSTRACT FROM AUTHOR]

In recent years South Korea has been unusually active in signing free trade agreements (FTAs), which is usually seen as a sign of the country's economic interest in expanding trade. We argue that Korean foreign economic policy also follows a political interest, namely that Korea prefers to pursue FTAs with fellow democracies rather than with authoritarian regimes. This preference for democracies has three complementary origins: 1) democratic dyads are peaceful dyads, such that Korea need not worry about empowering rival nations through FTAs, 2) democratic regimes are more accountable, such that FTAs are more likely to be enforced in a democratic regime, and 3) democratic countries are more likely to see a national interest in FTAs, further increasing the chances of Korea pursuing a FTA. We test this argument with an original dataset on Korea's FTA consideration from 2000 to 2011, using Cox Proportional Hazards models. [ABSTRACT FROM AUTHOR]

Agricultural liberalization is one of the most contentious trade issues in Japan and Korea. Yet, important differences characterize the Japanese and Korean governments’ positions on agricultural liberalization when negotiating on free trade agreements (FTA). The Korean government supports substantial agricultural liberalization, whereas the Japanese government is reluctant to abandon farm interests even at the risk of undermining its FTAs. Given strong similarities in their agricultural structure and politics, how do you explain divergent government positions between Japan and Korea? The structure of a country's domestic trade governance largely explains the Japanese and Korean governments’ varying approach to agricultural liberalization during FTA negotiations. Domestic trade governance refers to the decision-making structure and process on foreign economic policies. Cohesive domestic trade governance enabled the Korean government to pursue agricultural liberalization under the broader national agenda of promoting trade through FTAs. In contrast, fragmented domestic trade governance gave disproportionately larger weight to agricultural interests within the Japanese government, ultimately allowing agriculture to undermine the success of Japan's FTAs. [ABSTRACT FROM PUBLISHER]

It will be over that the jointing research on China -- Japan -- ROK FTZ in the end of this year and it is expected to enter the stage for the governments' negotiations in 2012. The three countries have maintained close relationships in the trade of commodities and services, investment and other economic cooperation in the latest years, and great potentials are anticipated in the future of China -- Japan -- ROK FTA. The FTA will create a much more opening and stable market and remarkable economic benefits for China; Moreover, China should evaluate China -- Japan -- ROK FTA from a more macro perspective with confirming its importance in implementing our regional economic cooperation strategy and taking the initiative in the process of Asia -- Pacific regional economic integration. China should also take a more positive and pragmatic attitude in the future negotiations. [ABSTRACT FROM AUTHOR]

The purpose of this study is to find the underlying factor that causes the impasse of the Korea-Japan FTA negotiation. This was to undertake a theoretically motivated empirical analysis of the Korea-Japan FTA in light of the inability of statist and systemic approaches to fully explain the stalemate. The fact that FKI led coalition of business associations changed its position regarding the FTA is critical in understanding what eventually resulted. It is precisely this outcome that the societal approach is equipped to deal with and analyse successfully. [ABSTRACT FROM AUTHOR]

This article examines the changing nature of the state's capacity under conditions of globalisation. In particular, it explores how the Korean National Assembly reacts to the challenge of globalisation as well as how a state develops its capacity to deal with transnational issues. By analysing the National Assembly's response to the ongoing issues of the Korea-Chile and Korea-USA Free Trade Agreements, this article points out the causes of the imbalance that exists between the parliament and the executive administration under the multi-level system of governance. It also examines ways of strengthening state capacity by reducing a perceived democratic deficit. The Trade Procedure Acts submitted to the 17th and 18th National Assembly can be expected to contribute to the improvement of the National Assembly's responsiveness and accountability and the state's capacity in the supranational sphere. [ABSTRACT FROM AUTHOR]

Korea's export-driven trade policy has been instrumental in increasing both exports and wealth of the nation at a rapid pace. However, the overemphasis on exports and the overprotection of firms in certain sectors have created economic and financial imbalances, hindered competition within the domestic market, and left the consumer market relatively closed. In order to transform Korea into an advanced economy, Korea must introduce and implement a more proactive liberalization policy; diversify its external trade relations; make its business environment more attractive; and enhance its role in the international community. [ABSTRACT FROM AUTHOR]

Although East Asia is regarded as one of the three major economic pillars in the world, it still has the lowest level of economic cooperation and integration compared to the EU and NAFTA. The Asian financial crisis in 1997/98 triggered a sense of "East Asian regional identity." A "functional integration" in East Asia has already occurred in the form of FTAs and some regional monetary cooperation. Although belatedly, South Korea has taken a highly proactive multi-track FTA policy stance so that FTAs can serve as effective and expeditious trade policy tools for economic restructuring geared to sustainable economic growth and consumer welfare, jump starting the multilateral DDA process. China, Japan, and South Korea have been scrambling for an FTA with ASEAN. China-led regional FTA and Japan-led FTA in an uncooperative game are likely to generate hub-spoke bilateralism in East Asia. East Asia should work out an ASEAN + China·Japan·Korea FTA that could set the tone for East Asian integration from a long term perspective. [ABSTRACT FROM AUTHOR]