• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.57
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• pp.283-303
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• 2013

When a trade conflict arises related to an officially supported export credit programme, The World Trade Organization(WTO), decides on whether the programme is a forbidden subsidy stipulated in the Agreement on Subsidies and Countervailing Measures(the ASCM Agreement). Korea was taken to the WTO panel two times for the export credit programme. One is the semiconductor case in 2002 and the other was the shipbuilding disputes in 2004. And, In 2012, the U.S. Commerce Department ruled K-SURE's export insurance for Korean refrigerator manufacturers as a forbidden subsidy even if the case was not taken to the WTO. This paper examines the significance of export credit programmes on the WTO ASCM Agreement and discusses how to operate these programmes so they would not infringe upon the Agreement by analyzing the actual cases of WTO subsidy conflicts that involved Korean enterprises in relation to export credit programmes for the purpose of determining the related issues and impacts. From this research the results were as follows: First, on whether export credit is a prohibited subsidy, the deciding factor was whether a benefit has been conferred to the beneficiary. On the presence of a benefit, the WTO panel used market benchmarks as the main criteria. Thus, official export credit agencies(ECAs) should be careful not to provide export credit support which had been granted to the beneficiary at better than market terms. Second, in the case of export credit, the special status of ECA as a public body receiving government support itself does not constitute a subsidy. However, caution must be taken not to provide export credit that may lead to WTO ASCM subsidy conflicts involving a certain exporter or industry by setting up clear and valid regulations and fair work processes in the operation of export credit programmes. Third, item (j) of Annex I cannot be interpreted reversely as this item is for interpreting the presence of a prohibited subsidy, not the presence of a benefit. Thus, an export credit program that confers a financial contribution, a benefit and specificity, could qualify as a prohibited subsidy. Fourth, ECAs not only have to maintain long-term account balance but also introduce additional measures to meet this long-term balance such as a clear and systematic premium system. Finally, export credit programmes that are not defined in item (j) of Annex I of the ASCM Agreement would not deemed as an prohibited export subsidy as long as the continued support of the programmes are not being forced.

• Journal of Korea Trade
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• v.24 no.2
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• pp.53-67
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• 2020

Purpose - The purpose of this paper is to study strategic trade policies under international process research and development (R&D) competition with or without market leaders for free trade and a subsidy regime and compare the effects of R&D subsidies and export subsidies on the equilibrium levels of firm profit and social welfare. Design/methodology - For the analysis, we use previous work by Haaland and Kind (2008) and construct a differentiated goods duopoly model, wherein two firms compete via quantity in a third-country market for free trade and the subsidy regime. We consider simultaneous-move quantity competition when the two firms choose their quantities simultaneously and sequential-move quantity competition when they choose their quantities sequentially. The results are compared to those of Balboa, Daughety and Reinganum (2004), who studied export subsidies. Findings - The following are the findings. First, the results of firm preference orderings regarding firm position from Dowrick (1986) and Balboa, Daughety and Reinganum (2004) may not hold in our model when the firms' strategies are strategic substitutes under free trade. Second, the preference rankings under Cournot competition for free trade and a subsidy regime are the same as those in the strategic trade policy of export subsidy. Third, except for the cases of too close substitutes and complements, the results of firm and government preferences regarding firm position are different from those of Balboa, Daughety and Reinganum (2004) in that Stackelberg leadership in a subsidy regime is advantageous when the goods are substitutes but is disadvantageous when the goods are complements. Moreover, the equilibrium level of firm profit is the highest in the Cournot-Nash play when the goods are substitutes in a subsidy regime. Fourth, except for the cases of too close substitutes and complements, the results of firms' and their respective governments' trade regime preferences are similar to those of Balboa, Daughety and Reinganum (2004) in that a Stackelberg leader firm and government prefer free trade if the goods are substitutes and prefer a subsidy regime if the goods are complements. Furthermore, a Stackelberg follower firm and government strongly prefer a subsidy regime to free trade. Originality/value - By analyzing the effects of R&D subsidies and export subsidies in international markets, we can find similarities and differences between them in international markets.

• International Commerce and Information Review
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• v.10 no.1
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• pp.259-277
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• 2008

This paper empirically analyzes the influence of export insurance on export promotion using panel data for the Korean case during the sample period from 2003 to 2006. We use the Korean export's share in trading partners' imports as a weight for the weighted least square (WLS) estimation to measure the effect of export insurance on the export promotion. Our main finding is that export insurance subsidy seems to enhance the export performance when the Korean export takes greater share in other countries' markets. On the other hand, under weaker monopoly power of the Korean export, export risk and trading partners' GDP growth rate has more influence on the export promotion rather than export insurance subsidy. Our finding implies that policy makers and practitioners should discern the Korean exports' monopoly power differential across trading countries for better performing export insuarnce policy.

• Korean Journal of Agricultural Science
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• v.38 no.1
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• pp.173-181
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• 2011

Korean government has executed some programs to support producers and/or exporters for the promotion of agro-food exportation. Especially, governmental subsidizing program about the distribution cost for agro-food exportation shows positive effects. However, this subsidy should be changed or partly abolished due to the low effectiveness of subsidy. The goal of this paper is to analyze the effectiveness of governmental subsidy and to present the agro-food products with the low effects of subsidizing program. As the results of analysis, the subsidy for several products, including Ginseng drinks, Paprika, and Chrysanthemum, might be considered to be stopped due to low effectiveness.

• International Commerce and Information Review
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• v.9 no.1
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• pp.451-465
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• 2007

It is true that every country which includes the developing country has planned own economic development through government subsidies. Korea also has developed their some major industry through supporting government subsidies. Under the WTO structure, however, government's specific supports for export firms come under prohibited subsidy and subsidy supporting must be based on WTO ASCM(Agreement on Subsidies and Countervailing Measures). The purpose of this paper was to study on the WTO ASCM and to analyze cases on the shipbuilding and Hynix DRAM dispute which Korean concerned major subsidy issue. Korea has been undergoing subsidy dispute with EU and U.S.A. concerned matter of shipbuilding and Hynix DRAM respectively. From this research results were as follow : First of all, the WTO ASCM introduced a definition of subsidy and divided subsidies into three categories and was legally bound through dispute settlement mechanism and implemented by all WTO members. Also, through analyzing cases, results were indicated that Korea wins a lawsuit against the matter of shipbuilding subsidy whereas losing the lawsuit against the matter of DRAM subsidy. It means that the case of shipbuilding subsidy do not violation WTO ASCM and the case of Hynix DARAM is against WTO ASCM. Additionally, as we see the dispute cases concerned Korean industry, it is necessary that government should operate subsidies which were provided for certain governmental policy as consisted with WTO ASCM.

• International Commerce and Information Review
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• v.10 no.4
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• pp.513-532
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• 2008

The purpose of this study was to analyze which factors have had impacts on extension export insurance charge of Korean export insurance. In order to attainment of this study, an empirical study was proceeded. The export insurance charge was hired as the dependent variable and export insurance premium, insurance compensation charge, export insurance collection charge and export insurance fund were used as independent variables. Data was used for estimation are the annually data from 1969 to 2007. From results of this analysis, we find the hired variables have highly correlation among them and the most influential factor turns out to be export insurance fund. Main results of this study was as follows : i) The export insurance fund must be increased immediately. ii) It is necessary that Korea Export Insurance Corporation give their attention to the compensate amount of export insurance compensation on specific insurance item. iii) It is necessary that Korea Export Insurance Corporation extension the collection efforts of the export insurance. iv) A reasonable raising of export insurance premium need to be done.

• Korea Trade Review
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• v.47 no.2
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• pp.1-18
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• 2022

This paper examines the effects of export subsidies on agricultural food exports, focusing on a case of Gyeongsangbuk-do. Using monthly data of agricultural food exports during 2007-2020 and the GLS regression analysis, we test the hypothesis whether the export subsidies would increase the exports of four major agri-food categories with three digit codes of HS such as fruits, vegetables, flowers, and mushrooms. Evidence shows that the export subsidies had statistically significant impacts on the agri-food exports except flowers. In order to test the robustness of the analysis, the agri-food export subsidies are reclassified into four sub-subsidy policies, and the analysis re-examines the effects of the sub-subsidies on agri-food exports. It shows that export policies for production stabilization, logistics, and overseas marketing promote the exports of agri-foods significantly. Alternative export policies are drawn in this study since the existing subsidies conflict with the WTO agricultural agreement.

• International Commerce and Information Review
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• v.10 no.4
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• pp.495-512
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• 2008

Because Korea and Japan has joined WTO and OECD, it is impossible to carry out a direct export-promoted policy such as export subsidies. Therefore, the only policy which is internationally valid for promoting an export is the export insurance. Hence export insurance system became more useful tool since it's one of the few allowed subsidies under WTO. This paper examines to find the impacts of export insurance on the export supply in Korea and Japan. The period of data is from 1980 to 2006. Unlike previous studies on the effectiveness of export subsidy in export supply, the current study examines the stationarity nature of the concerned variables. The unit root tests show that all variables are not I(0) Time Series. Instead, they are I(1) Time Series. To this, cointegration verification was conducted based on the use of Johansen verification method to define the existence (or non-existence) of long-term balance relationship among variables. The concerned variables are revealed to be cointegrated. In order to analyze, this study introduce a VEC model. In this paper we construct two VEC models. The one is about Korea, the other is about Japan. The empirical evidences show that export insurance system has not contributed to promoting export supply in Japan. But the results of empirical analysis showed significant and positive effects of Korea export insurance upon the export supply.

• Current Industrial and Technological Trends in Aerospace
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• v.6 no.2
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• pp.11-21
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• 2008

This paper focuses on finding the way of aerospace industry promotion in Korea compatible with fair trade system under international rules by considering and analysing the WTO subsidy rules and WTO dispute settlement cases. As for subsidy rules in WTO, the paper deals with two matters such as financial contribution and benefit and further studies provisions on the prohibited subsidies and actionable subsidies. And as for the dispute settlement matters, it reviews the Brazil-Canada case and the US-EC case on civil aircraft export subsidies. While aerospace industry in Korea is not yet internationally competitive still requiring government's continuous supports, it must not be in conflict with subsidy rules under WTO mechanism. This paper makes several suggestions to meet these conditions.

• The Journal of Information Technology
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• v.1 no.2
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• pp.119-141
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• 1998

The main contents of WTO agricultural product agreement are composed of $\circled1$ market access $\circled2$ domestic subsidy and reduction of export subsidy $\circled3$ preferences for developing countries. But there still remains the possibility of laying a protection barrier within WTO regulations. That is to say, with the application of quota system, tariff rate quota system, or different quotas on different countries, and with the practices of government control trade and mark up. This paper is for studying the application of these protection barriers to minimize the impact of agricultural market opening.