FTA Policy Research Articles

한-ASEAN 자유무역협정(FTA)의 수출촉진 효과 분석

Purpose - This paper empirically examines whether the Korea-ASEAN FTA really promotes Korea’s exports, thereby drawing some policy implications for the Korea’s FTA policy.
 Design/Methodology/Approach - We first calculate the export-promotion effects of the Korea-ASEAN FTA as well as other Korea’s FTAs using a difference-in-difference (DID) method, and then conduct both static and dynamic panel regression analyses based on the augmented gravity model, using Korea’s FTAs and relevant data over the period from 1999 to 2018.
 Findings - First, DID results reveal that the Korea-ASEAN FTA has increased its exports by 9.1%, which is much larger than the FTAs with China (-7.2%), India (-9.1%), and the EU (1.2%), but lower than the FTAs with the USA (10.4%) and EFTA (26.2%). Second, however, neither static nor dynamic panel data regression results support the export-promotion effects of the Korea-ASEAN FTA, regardless of estimation methods and export categories. Finally, ASEAN membership itself plays a statistically significant role in promoting Korea's exports to members, which implies that Korea would export more to the ASEAN members than its normal level stipulated by a gravity equation even without the FTA.
 Research Implications - Unlike what is commonly believed, Korea’s FTA with ASEAN as well as its other FTAs were not likely to increase its exports in a statistically significant way. It is particularly true for its FTAs with developing countries. Thus, the Korean government needs to keep improving the content of existing FTAs with developing countries to enhance the market access of Korean products.

Evaluation of the Policy Effects of Free Trade Agreements: New Evidence from the Korea-China FTA

Purpose – The policy implications of free trade agreements have traditionally been a matter of debate among economists. The official signing of the Korea-China Free Trade Agreement provides economists with a quasi-natural experiment to analyze the FTA’s policy effects. This article aims to more accurately understand the impact of Korea’s FTA accession on the macro economy. Design/methodology – This study adopts the counterfactual method based on panel data to find common factors in the generation process of macro data to fit the counterfactual path, to accurately evaluate the effect of the macro policy. Findings – Our research results show that the signing of the Korea-China FTA has a relatively significant short-term positive effect on Korea's economic growth. On average, Korea’s real GDP growth rate has increased by 2.1%. This study finds evidence in support of FTA signing not having a significant impact on Korea’s GDP growth in the long run. Additionally, we evaluated the impact of the FTA on Korea’s imports and exports and found that it had a significant positive impact in the short term, but the trade effect of the FTA is significantly affected by the external macro-environment. Originality/value – First, this study uses macro panel data at the national level to examine the impact of the Korea-China FTA on Korea, and more accurately describes the policy effect of the FTA. Second, our empirical results show that the Korea-China FTA policy impact is subject to occasional changes in the external environment, such as the geopolitical conflict (crisis) between Korea and China, and the US-China trade war. Finally, the analysis shows that the short-term effect of FTA is significant but the long-term is uncertain, which provides empirical evidence for the debate on whether joining FTA can promote national economic growth.

The Impact of Intellectual Property Protection through FTA on International Trade

The importance of intellectual property rights (IPRs) for innovation has grown and the protection of intellectual property in international trade has also been strengthened. AI-related patent applications have been increasing rapidly and many AI patents are being filed in various industries. Intellectual property also represents one of the main controversies of U.S.-China trade relations in the past three decades and remains one of the core issues behind the two countries’ recent trade conflicts. As a result, global protection for IPRs has been expanded in recent decades. This article investigates changes in the trend regarding the IP protection level in FTA and how the IP protection through FTAs has affected the composition of aggregate trade flows of member countries in order to provide basic findings necessary to formulate the FTA policies regarding the protection of IPRs in Korea.

The Effects of Free Trade Agreements on Smes’ Direct and Indirect Exports

FTAs have been known to have large positive effects on trade creation between member countries. However, it is relatively unexplored how much small/medium-sized enterprises (SMEs) accounted for in the trade creation due to FTAs compared to large-sized enterprises (LEs). We find that Korean FTA policies have significantly increased SMEs’ direct exports to FTA partner countries between 2005 and 2017, although the effects were as much as a half of those for LEs, which indicates a considerable LEs’ premium in the direct export effects of FTAs. We further find that the FTAs also significantly increased the indirect exports of Korean firms, i.e., the domestic input supplies through in-dustrial input-output linkage, and that SMEs have benefited more from the indirect export effects of FTAs than LEs. Considering the direct and indirect export effects together, the LEs’ premium in the total export effects of FTA is found to become smaller.

한·중미 5개국 FTA 발효에 따른 중미시장 활용방안(Trade and Investment Implications of Korea-Central America Free Trade Agreement)

한·중미 5개국 FTA 발효에 따른 중미시장 활용방안(Trade and Investment Implications of Korea-Central America Free Trade Agreement)

The China–Japan–Korea Trilateral Free Trade Agreement: Why Did Trade Negotiations Stall?

Launched in 2013, the China–Japan–Korea Free Trade Agreement (CJKFTA) negotiations have slowed in recent years. The three countries have convened at 14 rounds of negotiations but failed to make any substantial breakthrough. A number of previous studies have presented a crisis‐driven approach in explaining the progress of the CJKFTA, and argue that the accomplished China–Korea Free Trade Agreement (CKFTA) will accelerate the CJKFTA negotiation. This study questions optimism over the CJKFTA, and investigates the reasons for the stalemate of ongoing negotiations. It does so by considering three sets of factors that have stalled the negotiation – economic interdependence, domestic politics, and industry interest groups – in addition to international politics/national FTA policies. First, the trilateral economic interdependence shows a downward trend in recent years and has weakened the necessity of having a trilateral FTA. Second, domestic sectoral interests remain highly divergent over a potential CJKFTA; opposition from loser groups in Japan remains strong, and the majority of the Korean business world still regard the utility of an accomplished CKFTA more highly than an accomplished CJKFTA. Finally, the three countries have failed to narrow the gaps during past negotiations because no party views the CJKFTA as a top priority, nor wishes to take the leadership. China does not want a high‐level CJKFTA; Japan's lack of political incentive and Korea's cautious “wait and see” stance have also led to a stalemate of the negotiations. In consequence, this article delivers a relatively pessimistic vision for the CJKFTA negotiation in the near future.

한국 FTA의 진화와 규범적 역할의 재발견

Traditionally, FTAs have been a means of economic cooperation by encouraging trade and enhancing economic cooperation between the countries involved. Recently, however, FTAs have been developed as a method of providing foundations of international cooperation in diverse fields between countries.BR Within the international society, many factors such as political changes and the trade field influence each other. With the evolution of FTAs, the new themes subject to those agreements give birth to various possibilities for the application of FTAs. Korea, which has many FTAs with many countries, is trying to utilize the FTA for the purpose of stabilizing and supporting the Korean peninsula.BR With the evolution of FTAs, the significance of FTA as law is also increasing. FTA is not only an international treaty but also domestic law, which is causing a change within the scopes of domestic law. This means, by developing various applications of FTA, more legal actions are necessary. Korea has revised many articles of domestic law. These tasks should be progressed continuously. The endeavor to sight new legal functions of FTA should come together.BR Domestic legal actions should be considered in many aspects. Establishment and complement of general law, considering consistent progress of FTA policies and cardinal principles, are necessary for legal actions. The amendment of law should be discussed to enable cooperation with many countries while considering the influence of future changes in the trade situation, technological innovation, cultural exchange, and natural environmental change. In other words, we should identify the new normative role of FTAs beyond economic meaning.

The political economy of preferential trade arrangements: The case of Japan

ABSTRACTSupport for open trade regimes varies. We analyze Japanese survey data on individuals' preferences for TPP, unilateral import liberalization, and East Asian economic integration, and compare factors influencing policy preferences. First, despite the massive negative campaigns against TPP, 42.8% of individuals support Japan’s participation in TPP, vs. 21.1% against. Second, economic factors do matter for an individual in determining his/her policy preference over TPP. Third, noneconomic factors such as gender, age, access to accurate information, and attachment to hometown also feature as determinants. Fourth, although preferences over TPP and other policy options are positively correlated, some factors decrease TPP support but do not undermine support for two other less-politicized policy options: lack of access to accurate information and some industry and regional TPP-specific factors. Criticism impacts negatively on FTA policy preferences. Finally, we discuss economic policy implications for relationships between China, Japan, and Korea.Abbreviations: FTA: Free trade agreement; JA: Japan agricultural cooperative; TPP: Trans-Pacific partnership agreement.

Evaluation of a Decade of Korea's FTA Policy

We analyze Korea’s FTA policy based on the outcomes of recent bilateral FTAs, in terms of achieving policy objectives. While many previous studies mainly focused on trade impacts under bilateral FTAs, this study analyzes the overall economic impact of FTAs in terms of growth and welfare, as changes in bilateral trade may affect global trade and the general economy in a variety of ways. In order to analyze the overall effect of FTAs, we adopt the Computable General Equilibrium (CGE) approach. With a CGE model, the macro economic impacts of FTAs can be calculated taking into account the complicated interactions among economic agents and industries. The growth effect in the EU shows the high-est results, followed by 0.9% growth and an additional 0.43% and 0.11%, in the ASEAN and Chile respectively. In addition, by com-paring the overall growth effect of FTA on total economic growth in 2013, the growth impact of FTAs accounted for 1.19% among 3% of total economic growth in Korea. This implies that Korea, as one of the most open economies in the world, could sustain positive growth rates due to FTAs such as the Korea-ASEAN FTA, despite the trade collapse during the global financial crisis.

Impact on Japan’s FTA Policy by the China-Koea FTA in East Asia Region

Impact on Japan’s FTA Policy by the China-Koea FTA in East Asia Region

The Impact on Customs of the Implementation of the China-ASEAN FTA

This paper examines the impact of the ASEAN-China Free Trade Area (ACFTA) on regional trade facilitation. An overview of the development of ACFTA is followed by a discussion on the need for ongoing consideration of new policies and measures to further enhance economic complementarity and industry cooperation with the goal of strengthening zero tariff FTA policies. Research indicates that although utilisation of preferential concessions is increasing, it is less than the original expectations of China’s Central Government. Policies are therefore being considered and other measures designed to enhance the utilisation rate. The challenges presented by these initiatives and their impact on Customs’ already limited resources are outlined. The paper concludes by identifying opportunities for Customs to effectively address the growth in regional trade and contribute to the negotiation, formulation and enforcement of rules of origin.

A CGE Analysis of Korea’s FTA Policy in the Presence of Growing Regionalism in Asia-Pacific

A CGE Analysis of Korea’s FTA Policy in the Presence of Growing Regionalism in Asia-Pacific

Importance of Public Outreach to the FTA Policy: The Case of Korea

Importance of Public Outreach to the FTA Policy: The Case of Korea

The TPP and East Asian Economic Integration: From the Japan–China–ROK perspective

This paper examines the influence Japan’s participation in the TPP negotiations will have on the course of subsequent East Asian economic integration, and mainly from the perspective of the three Northeast Asian countries of Japan, China and the ROK. In the first half, as a premise thereto, we first bring together the development of the FTA policies of China, the ROK and Japan, and then the connections with East Asian economic integration.

The TPP and East Asian Economic Integration: From the Japan–China–ROK perspective

This paper examines the influence Japan’s participation in the TPP negotiations will have on the course of subsequent East Asian economic integration, and mainly from the perspective of the three Northeast Asian countries of Japan, China and the ROK In the first half, as a premise thereto, we first bring together the development of the FTA policies of China, the ROK and Japan, and then the connections with East Asian economic integration.

Disparation and FTA: disparity between FTA policies and strategies in case of Korea-India CEPA and Korea-Peru FTA

Disparation and FTA: disparity between FTA policies and strategies in case of Korea-India CEPA and Korea-Peru FTA

A Good Governance of FTA Policy: Developing Indicators of Good Governance and the Evaluation of Korea-U.S. FTA

A Good Governance of FTA Policy: Developing Indicators of Good Governance and the Evaluation of Korea-U.S. FTA

Korea’s FTA Policy and the Global Strategy of Korean Multinational Firms

Korea’s FTA Policy and the Global Strategy of Korean Multinational Firms

From Latecomer to Forerunner in Global FTA Networks: A Change in South Korea’s FTA Policy

이 논문은 1990년대 후반부터 2000년대 후반까지 한국 FTA 정책의 변화를 살펴본다. 기존의 수세적, 추격자형, 역내지향적, 그리고 우회접근형 FTA 정책은 2005년 미국과의 FTA 시도를 기점으로 공세적, 선발자형, 역외지향적, 그리고 (거대시장) 직접접근형 FTA 정책으로 변화하게 되었다. 이러한 변화는 기존 정책의 자연적. 점진적 전화라기보다는 질적, 급진적 정책 변화로 이해되어야 한다. 정책변화의 동인은 국제적, (동아시아) 지역적, 그리고 국내적으로 각각 살펴볼 수 있는데, 전세계적 차원에서 두드러지게 나타나고 있는 지역초월자유무역협정의 확산현상, 동아시아 국가들의 실질적인 자유무역협정 체결에 대한 비관적 인식, 그리고 개방통상정책/국가경쟁력 강화 등 국내정책의 공고화를 위한 같은 동기 등이 복합적으로 작용하고 있다고 할 것이다. 한국의 역외 거대국과의 FTA는 동아시아 FTA에 걸림돌이 되기보다는 양자적, 지역적 FTA가 공존, 경쟁하는 동아시아의 복잡한 FTA 네트워크를 형성하는데 기여하게 될 것이다.

The Domestic Political Origins of FTA Policy: A Comparative Study of Korea, Japan, and Singapore

The Domestic Political Origins of FTA Policy: A Comparative Study of Korea, Japan, and Singapore