• Journal of Korea Trade
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• v.23 no.6
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• pp.1-13
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• 2019

Purpose - This study deals with a strategic plan for meeting the value added criteria effectively, which is one of the methods of determining origin used in preferential trade such as FTA. Automobile products, one of the major Korean export items, were selected to give a practical use against the FTA requirements. Design/methodology - This study is based on the value-added criteria of the Korea-US and Korea-EU FTAs that apply various value-added criteria. The Korea-US FTA adopts the RVC method based on the integration, deduction and net cost methods, while the MC method is employed in the Korea-EU FTA. The methodology used in this work is an extended literature review, analysis of the value-added criteria applied to automobile products under Korea-US and Korea-EU FTA with some secondary statistics. Findings - Based on in - depth analysis of the value - added criteria requirements for automobile products stipulated in the Korea - US FTA and the Korea - EU FTA, two strategic considerations are suggested. First is 'appropriate value-added strategy' and the second is 'strategy of changing production and trade structure'. The second strategy is a bit used in Korea but this is not considered best if the first strategy is ignored or forgotten. The second one is meaningful when this becomes inevitable. Research limitations/implications - This study is primarily designed to assist Korean auto mobile industry players exporting to EU and USA but this may help to auto part or material producers in FTA counter party territories being EU or USA as the preferential tariffs are applied on a inter region basis. A further research other than auto mobiles using other major FTAs might be followed later. Originality/value - There has been so far little research on strategic factors to meet the value-added origin requirements. This study, therefore, is expected to contribute facilitating the decision of FTA origin and to improve the utilization of FTA by allowing exporting companies using value added criterion to more smoothly meet origin requirements. This will also enable the tax authorities to utilize the value-added criterion to validate effectively the origin of imports where preferential tariffs are applied.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.17 no.7
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• pp.648-655
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• 2016

As the FTAs' implementations are accelerated, an Ex-post assessment, such as an analysis of the tariff schedule and agricultural trade has been emerging as an important national issue for an agricultural sector Korea-EU FTA, which was to be implemented in the five years from July 2016 as one of the giant FTA. The purpose of this study was to determine the demand of an ex-post assessment on agricultural sector as a trade negotiation procedural law. In addition, by providing policy direction for the agricultural policy part requiring amendments and supplements through ex-post assessment, the conflicting arguments between agricultural and non-agricultural sector can be evaluated more objectively. The current evaluation method on the economic impact ex-post assessment of a FTA is generally compared using the change in trade balance before and after the time of FTA implementation. On the other hand, this comparison cannot be said to be the pure FTA effects and objective, tightening economic impact assessment of the FTA in all combined situations, such as the effects of exchange rates and international macroeconomic changes and climate change & occurrence of pests. Over the last 4 years, however, Korea-EU FTA's total accumulated agricultural GDP loss was measured to be 2,178 billion by these research attempts with dynamic analysis as ex-post assessment methodology. The greatest impact was mainly livestock and pork followed by cereals and vegetables. In addition, this research is expected to contribute to policy evaluations in the future.

• 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.

• Journal of Korea Trade
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• v.24 no.5
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• pp.1-17
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• 2020

Purpose - This paper tries to estimate the effects of China's and Japan's free trade agreement (FTA) by panel generalized least squares (GLS). Design/methodology - The GLS model includes the basic gravity theory and Difference in Difference (DD) method to divide FTA conclusion countries and non-FTA conclusion countries with China and Japan. In order to empirically research the difference between Chinese and Japanese FTAs, we use the Difference in Difference in Difference (DDD) method. Findings - This paper finds the distance variable has more influence on Japanese than Chinese trade. The exchange rate indicates that Chinese trade depends on export and Japanese trade has the structure of re-import; shows that the countries that concluded FTAs with China and Japan have more positive trade effects than those that did not; finds the Chinese FTA promotion effects greater than the Japanese FTA because China had pushed ahead with trade policy since joining the WTO in 2001. Originality/value - This study shows that a single country's FTA and trade policies are an important factor concerning not just the promotion of trade but also the issue of trade conflicts.

• International Commerce and Information Review
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• v.17 no.1
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• pp.265-285
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• 2015

After the establishment of WTO for strengthening of GATT in 1995, the world economy has gradually been integrating toward economic globalisation. Even though this multilateral agreement may be beneficial to many countries but it also interferes domestic policies of member countries and threatens the role of local government and policy independence. For these reasons, FTA between countries or regions has been increasing. According to this trend, Korea and China has reached a substantial agreement of Korea-China FTA for mutual benefits. In general, the Korean automobile industry will benefit from Korea-China FTA due to its competitiveness in the global market and improvement of market access. However in the provisional schedule of concessions and commitment reported by press, the automobile seems to be excluded in this schedule of concessions. Hence, Korean automobile industry can not use the price competitiveness from tariff elimination. Therefore, Korean automobile industry needs aggressive marketing strategies for enhancement of brand equity as well as development of environment-friendly cars for following environment policies of Chinese government. Furthermore, they should make efforts to create the efficient investment environment by the removal of non-tariff barriers.

• International Commerce and Information Review
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• v.9 no.1
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• pp.313-331
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• 2007

In a rapidly changing environment of international trade, the purpose of this study is to examine economic benefits and losses of each country involved in the negotiation on the Free Trade Agreement (FTA) in Northeast Asia and to prepare strategies for the negotiation in the FTA between Korea and China. Previous researches on FTA have been made mainly from the macroeconomic perspective. The approach in this study is a combination of regulatory, reviewing regulations, and economic making quantitative analysis of the economic effects of FTA, which are the basic background of FTA. In economic analysis, I estimated the macroscopic economic effects of FTA by examining the effects of FTA on the trade balance, GDP and production of focal countries through the Computable General Equilibrium(CGE) model using GTAP data set.

• SUVANNABHUMI
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• v.15 no.1
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• pp.255-275
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• 2023

Trade between South Korea and Malaysia has been steadily increasing since the conclusion of the multilateral Free Trade Agreement (FTA) between the Association of Southeast Asian Nations (ASEAN) and South Korea. Bilateral FTAs such as Singapore-South Korea, Vietnam-South Korea, and Indonesia-South Korea came into effect to enhance the economic cooperation between South Korea and major ASEAN countries. However, the bilateral FTA between South Korea and Malaysia, known as Republic of Korea-Malaysia FTA, is still under negotiation. Therefore, this study aims to analyze the economic impact of a possible FTA between these two countries. To examine the economic effects of bilateral FTAs, this study analyzes the trade structure and change in the value of trade between Malaysia and South Korea using panel data analysis. Two significant findings were identified by the analysis. First, the Republic of Korea-Malaysia FTA is expected to promote trade and have a positive effect on the Gross Domestic Product (GDP) of South Korea. Second, the result of the calculated price elasticity based on substituting figures such as tariff, demand elasticity, and export value is that the value of manufacturing exports is expected to considerably get an increase. Therefore, an early FTA between South Korea and Malaysia would be beneficial for both national economies.

• 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.

• Food Industry
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• s.206
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• pp.26-41
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• 2008

Recently, Korea have experienced numbers of FTAs with other countries, including Chile, EFTA(European Free Trade Association), Singapore, ASEAN(Association of South-East Asian Nations), and U.S. In particular, FTA with U.S. are expected to cause huge impact on food markets as well as agricultural sector in Korea. Many researches have analyzed and discussed about the impact on agricultural sector after Korean-U.S. FTA, but very small number of studies focus on the impact of Korean-U.S. FTA on food markets. The purpose of the paper is to discuss the impact of Korea-U.S. FTA on Korean dairy market. For the numerical simulations, this paper focus on the impact on cheese and butter markets. The results of numerical analysis in the paper will be helpful for the future research, because few (maybe no) studies conduct the numerical analysis to measure the impact of Korea-U.S. FTA on Korean food market.

• 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.