• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.55
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• pp.243-264
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• 2012

This study is aimed to analyze problems related to FTA country of origin of goods verification which is increasing from 2006 and thereby to grope for solution of such problems and seek adequate FTA performance administration. It is found, through comparative analysis and statistics of last 8 FTAs so far Korea has concluded that there are major problems such as excessive verification processing due to complicated country of origin regulation etc. This paper suggests following policies of country of origin administration ; (1) Simplification of FTA country of origin rules (2) reciprocal cooperation between each country's Customs Authorities based on trust (3) rational measurement against corresponding country's Customs Authorities' misbehavior (4) enhancement of transparency in relation to processing rule of country of origin verification (5) securing FTA country of origin verification experts. For these improvements, upcoming FTA shall rule country of origin reasonably, simplification and transparency of rule is needed for established FTAs in relation to FTA performance administration with corresponding countries. Also it is necessary to revise FTA preferential tariff law and its related laws, and carry forward policies in accordance with medium and long term plan.

• Korea Trade Review
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• v.44 no.3
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• pp.1-14
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• 2019

We compared and analyzed the effects of establishing multilateral FTA and bilateral FTA on the R&D investment of exporting firms when they compete in Cournot fashion and when the government of the importing country acts strategically. In the short run, we found that the importing country prefers to enter into a bilateral FTA with each exporting country separately for maximizing its welfare. However, we also found that, in the long run, it is more welfare-enhancing policy for importing country that entering into a multilateral FTA with all of the exporting countries simultaneously because it helps facilitate the R&D investment of exporting firms. But once entering into a multilateral FTA, the exporting firms would be faced with more intensive R&D investment competition and hence they would suffer severe welfare loss.

• International Area Studies Review
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• v.22 no.2
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• pp.3-18
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• 2018

This paper analyzes both the FTA effects and FTA spillover effects on bilateral trade using 62 countries' panel data during the period of 2003 ~ 2013. To this end, we construct a FTA dummy variable for the effect of FTA in the model and the weighted FTA matrix interacted with export and import for the spillover effect of FTA. Gravity model is applied to the empirical analysis with GMM, fixed and random effects, and PPML estimation. As a result of the analysis, FTA variables have positive relationships with bilateral export and import. The weighted FTA matrix interacted with export and import also have positive signs on the bilateral export and import in all estimations. Thus, we conclude that various FTAs of neighbor or 3rd countries increase the bilateral export and import. We provide some implications that a country to increase the amount of trade has a trade relationship with the countries having various FTAs and for the FTA effect analysis, the three-country model is better than to the two-country model.

• Journal of Korea Trade
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• v.23 no.3
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• pp.84-104
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• 2019

Purpose - This paper explains why free trade agreements (FTAs) are more popular than customs unions (CUs) in respect of tariff coordination. Design/methodology - This paper employs an equilibrium theory of trade agreements with tariff coordination. I set up three-country partial equilibrium model with competing exporters. Domestic and exporting firms decide their optimal production under given tariffs and each country levies its tariff under the trade agreements. I found stability of implicit tariff coordination and preference of each country between an FTA and a CU. Findings - I demonstrate that two FTA members can keep their external tariffs higher than separately decided external tariffs by keeping the status-quo. This implicit tariff coordination can benefit each member through trade diversion. In a CU, each member country must have a common optimal external tariff and it must incur costs because each country may seek different external tariffs for their own national welfare. The benefit of implicit coordination in an FTA and the cost of explicit coordination in a CU account for the popularity of the FTA. Originality/value - This paper uses the idea of implicit tariff coordination in trade agreements. In a CU, tariff coordination is explicit and mandatory. All member countries must have a single common external tariff for each good. On the other hand, in an FTA, each country establishes its external tariff with the goal of maximizing its own welfare. However, each country can also coordinate "implicitly" by keeping the status-quo after establishing an FTA.

• International Commerce and Information Review
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• v.15 no.2
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• pp.317-344
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• 2013

This study wished to construct and propose correct Korea-USA FTA business model in Food Industry for FTA practical use maximization. First, the application item of Wholly Obtained Criterion may have to construct Wholly Obtained Criterion FTA practical use strategy. This strategy is to export to FTA country concerned after process domestically made main material. Second, the application item of Change in Tariff Heading may have to construct Change in Tariff Heading FTA practical use strategy. This strategy exports to FTA country concerned after that process that receives tariff cut(Cost reduction) benefit, and satisfies Change in Tariff Heading importing main material from third country (The FTA conclusion country).

• International Commerce and Information Review
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• v.13 no.3
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• pp.143-166
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• 2011

This paper describes the characteristics and outline of rules of origin among Korea and USA, EU, ASEAN. The main focus of this paper is to conduct comparative analysis on rules of origin. Rules of origin are used to determine the country of origin of a product for purposes of international trade. There are two common types of rules of origin depending upon application, the preferential and non-preferential rules of origin Non-preferential rules of origin are used to determine the country of origin for certain purposes. The basis for the non-preferential rules originates from the Kyoto convention which states that if a product is wholly obtained or produced completely within one country the product shall be deemed having origin in that country. For a product which has been produced in more than one country, the product shall be determined to have origin in the country where the last substantial transformation took place. To determine exactly what was the last substantial transformation, three general rules are applied : Change of tariff classification(on any level, though 4-digit level is the most common), Value added-rule.(ad-valorem), and Specific process rule. While criteria of wholly obtained or produced in one country is almost similar to those of theses area and countries, in compliance with value percentages of Substantial Transformation, sufficient working or processing, Korea-US FTA adapts 'Regional Value Content', meanwhile Korea-EU FTA adapts 'Import Content' rule. Finally, Korea-US FTA and ASEAN FTA adapt FOB price for the calculation value added, on the other hand Korea-EU FTA adapts EXW price.

• International Commerce and Information Review
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• v.10 no.1
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• pp.155-174
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• 2008

This study wished to inspect about certificate of origin issuance authorities subject in certificate of origin issuance mode by spread of FTA, and investigate about improvement plan of current certificate of origin issuance authorities choice for smoothness trade business our country in FTA age to be expanded gradually. Fundamental purpose and meaning of FTA strengthen industry competitive power of two countries because expand trade and investment between the agreement conclusion country, and is expected to esteem agreement target department's estimation at FTA certificate of origin issuance subject choice because is meaning that strengthen trade competitive power, and raise trade company's convenience. Therefore, our country FTA representative authorities is recognized authoritativeness and stability from trade company and trade connection authorities, and is suitable in legal application or institution that can propel with consistency about policy propelled hereafter has to be chosen, FTA agreement country is representative authorities that recognize, and to issue from customs services which is a government agency which can progress business is place of origin issuance business and the place of origin examination, is expected to become more and more effective.

• International Commerce and Information Review
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• v.8 no.2
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• pp.249-274
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• 2006

This study extensively investigated Japan's FTA strategy and plan of FTA policy and analyzed the economic effect caused by it. In the analysis of economic effect using world economical model shows not only positive economic effect in home country but also to the foreign country. Recently, Japan's bilateral relation with Korea and China is getting worse, not in a friendly way. Consequently Japan's future FTA negotiation will be expected to be focused on the East-Asia region. In other words, Japan expressed assistance for the purpose of communication, stability and prosperity in the East-Asia and will seek individual economic cooperation with each East-Asia country trying to reinforce the stand of Japan. This means that Japan is trying to improve the relation with Korea and China in the other way because it cannot change the relation with Korea and China on its own. That is to say, It can be interpreted as Japan is trying to reinforce the economic cooperation with other East-Asia countries for the realization of East Asia community rather than directly negotiating with Korea or China.

• International Commerce and Information Review
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• v.15 no.2
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• pp.365-383
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• 2013

This article stands at the junction of two usually separate fields of study: the politics of International Commerce and Consumer welfare. Conception of welfare state and Welfare society is different depending of the scholars in each country. This paper examines the consumer welfare level of import products in FTA countries. The results shows that FTA country products reaches the same welfare level in sexually, age and job. This paper contributes to this issue by considering consumers that incur consumer welfare level with import products costs.

• Korea Trade Review
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• v.45 no.4
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• pp.1-24
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• 2020

This study aims to analyze the export effects of Korea-Canada FTA's tariff reduction, which was launched on January 1, 2015. First, as a groundwork, this study reviewed trade creation and trade diversion by investigating all possible cases of both initial FTA and additional FTA. The review was done by using the simple model of three countries assuming FTA means elimination of tariff. The review suggested that additional FTA doesn't have any negative impact on import country's social welfare contrary to initial FTA. In additional FTA, Trade diversion could happen between FTA partner countries, but it always increases import country's social welfare. In this sense, it can be called favorable trade diversion. Second, this study analyzed the export effects of Korea-Canada FTA using Clausing's product level model based on Canadian government import data from Korea which is not open to the public. It turned out that Korea-Canada FTA's tariff reduction boosted Canadian import growth rate from Korea. On the other hand, Canadian import growth rate from rest of the world was not negatively affected by Korea-Canada FTA's tariff reduction. Rather, it increased as Canadian import growth rate from Korea was higher. These findings implied trade creation rather than trade diversion of Korea-Canada FTA when it comes to Korea's export to Canada.