Analysis of AEO MRA’s Export Effect to Korea Using the CGE Model: Focusing on AEO MRA in Korea and Russia

Abstract

Purpose - The purpose of this study was to predict AEO MRA effects in advance by analyzing the economic ripple effect of AEO MRA in Korea and Russia via CGE. Design/Methodology/Approach - Through the gravity model, we empirically analyzed the effect of Korea’s AEO MRA, and that effect was converted into a tariff equivalent value. Prediction analysis was conducted through CGE. Findings - As a result of analyzing the effects of the AEO MRA signed by Korea so far as a tariff equivalent value, it was estimated that there was a tariff reduction effect of 4.4%~8.8%, and using this value, the economic ripple effect of the Korea-Russia AEO MRA, which is currently expected to be signed, was investigated. In Korea, GDP was estimated to increase by about 0.008-0.012% and in Russia by 0.0015%-0.0029%, and most export items between the two countries were also analyzed to have a positive effect. Research Implications - Using CGE, this study conducted economic impact assessment which is limited in AEO MRA related studies and presented implications. In addition, it proposed one of the prediction analysis methods in AEO.