A Study on the Effect of Technical Barriers to Trade (TBT) Measures on Imports from China and Employment in Korea

Abstract

Purpose - The number of Korea’s Technical Barriers to Trade (TBT) notifications is increasing, and TBT is recognized as a form of trade barrier. Furthermore, Korea is highly dependent on trade, and the proportion of imports from China is large. Therefore, this study analyzed the effect of TBT on imports from China and Korea’s employment.
 Design/Methodology/Approach - This study aimed to analyze the impact of TBT in Korea on imports and employment in China. Therefore, TBT and other data from 1995 to 2017 were collected to form panel data. A gravity model was used to analyze the import effect of TBT, and import competition was used to analyze the employment effect. A Hausman test was performed to increase the accuracy of the panel analysis.
 Findings - TBT had no effect on the import of the entire manufacturing industry and of manufacturing intermediate goods. However, as a result of analysis by detailed industry, TBT decreased the imports of electronic parts, electrical equipment, and steel industries. However, TBT had no effect on the plastics industry, and TBT rather increased the imports of the chemical industry. TBT had a positive effect on the number of employees of the manufacturing industry.
 Research Implications - While previous literature conducted in Korea mainly focused on the impact of TBT by trading partners on exports, this study focuses on imports and employment. It is expected to fill gaps in existing studies.