An Analysis on the Determinants of Agricultural Export due to the FTA: Focused on Korea-EU and Korea-EFTA

Abstract

Purpose - The global agricultural trade market is an area where practical obstacles exist to simply compare comparative advantages by trading products that reflect the characteristics of each country’s natural and geographical conditions. In particular, agricultural products are not only the characteristics of economic goods like other goods, but also the trade between diverse industries such as food security and sustainable environment preservation, which can be interpreted in various ways. In the case of the European Union (EU), a joint policy on agricultural products is being pursued, and the European Free Trade Association (EFTA) is also classified as an area where the agricultural market plays a major role. Design/methodology/approach - This study examined the current status of agricultural trade between the EU and the EFTA among the signed free trade agreements and derived determinants for securing the competitiveness of Korea’s agricultural exports. The analysis method was analyzed using the export demand function using the panel data. Findings - Analysis shows that the free trade agreement between the EU and the EFTA has been put into effect, which has a positive impact on exports. It can be interpreted that agricultural products accounted for a relatively high proportion of the total export volume. The export effect is interpreted as a result of the easing of non-tariff barriers in the agricultural sector in addition to tariff rate cuts through the conclusion of the free trade agreement. Research implications or Originality - In order to export Korea’s agricultural products in the future, export expansion measures should be introduced in terms of easing non-tariff barriers in addition to tariffs.