• Journal of Korea Trade
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• v.26 no.1
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• pp.33-56
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• 2022

Purpose - This paper explains how free trade agreements (FTAs) work as a building block to achieve global free trade and be better than other trade regimes. Design/methodology - This paper utilizes a trade liberalization game setup. Three countries choose a trade agreement strategy based on a given trade regime. Trade agreement is made only when all member countries agree. The paper evaluates each trade regime concerning FTAs and customs union (CU) by area size of global free trade equilibrium on the technology or demand gap between countries. Findings - FTAs make global free trade easier. In this game, there are two main reasons for failure to reach global free trade. First, a trade regime with FTAs makes non-member face difficulties in refusing trade agreements in the existence of a technology gap than a trade regime without FTAs. Also, a trade regime with FTAs causes it harder to exclude non-members in the existence of a demand gap than a trade regime with only CUs. Therefore, a trade regime with FTAs can work better in reaching global free trade. Originality/value - The concept of "implicit coordination" was used, which assumes that FTA members keep external tariffs for non-members the same as before an FTA. Without this consideration, FTA members lower their tariffs to non-members, and it makes non-member refuse free trade easier. FTA can prevent it sufficiently only with implicit coordination. This makes the trade regime with FTAs more effective to reach global free trade.

• International Commerce and Information Review
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• v.13 no.3
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• pp.511-541
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• 2011

The study analyzes the optimum Korea-China FTA negotiations by utilizing the Putnam's two- level game theoretic approach. According to the Putnam's theory, the size of the win-set depends on the strategies of the Level 1 negotiators. The size of the win-set depends also on the level 2 political institutions and the distribution of power, preferences, and possible conditions among Level 2 constituents. The basic principles for the successful future Korea-China FTA negotiations should be based on comprehensiveness, substantial liberalization and gradual liberalization with consideration of sensitive sectors. This study concludes that mid-level FTA strategy with comprehensive but low tariff reduction would be of best strategy for Korea. This study also suggests the utilization of the EHP(Early Harvest Program) for the successful Korea-China FTA negotiations.

• Journal of Environmental Policy
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• v.7 no.3
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• pp.41-61
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• 2008

Although the size of the organic food market in Korea has increased significantly, its further development is hampered by the information asymmetry between the producers and consumers of organic food. It isn't just about revitalizing the market; it's also about Korean farmers surviving an era of trade liberalization. In order to produce more value-added products, the information asymmetry issue has to be resolved regarding the organic food market and other agricultural credence goods such as Han-woo(Korean beef). Therefore, measuring information asymmetry has become a central issue. One way to measure asymmetry is to use Game Theory. However, in practice, estimating payoffs at the industry level is hard to accomplish, and even when it is possible, the reliability of the estimated payoffs is not guaranteed. As an alternative, the concept of Information Entropy(disorder level of information), developed by Shannon(1948), was used in this study. It is proposed that this measure should be used when assessing the level of information asymmetry in the Korean organic food market. Using recent data, it was found that information entropy in the Korean organic food market has been decreasing constantly since 2003. Therefore, it was proposed that measures should be adopted by the government to improve the certification system of organic food.