• Journal of Korea Trade
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• v.25 no.1
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• pp.1-17
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• 2021

Purpose - The global trend of protectionism has expanded since the onset of US President Donald Trump's administration in 2017. This global phenomenon has led to a significant reduction in world trade volume and a negative impact on economic development in some countries where the external sector accounts for a large proportion of GDP. Although Korea is a country vulnerable to this deteriorating trade environment, few studies have examined the relationship between protectionism and its business cycles based on Korean data. Thus, this paper investigates the impact of protectionism on Korea's business cycle. Design/methodology - To identify future implications, we conduct a structural vector autoregression (VAR) analysis using monthly Korean data from 1994 to 2015. Macroeconomic variables in the model include the industrial production index, inflation rates, exports (or net exports), interest rates, and exchange rates. For the identification of the shock reflecting the expansion of protectionism, we use an antidumping investigation (ADI) data. Since ADIs are followed generally by the imposition of antidumping tariffs, they have no contemporaneous impact on tariffs and are also contemporaneously exogenous to other endogenous variables in the VAR model. We examine two kinds of ADI shocks i) shocks on Korean exports imposed by Korea's trading partners (ADI-imposed shocks) and ii) shocks on imports imposed by the Korean government (ADI-imposing shocks). Findings - We find that Korea's exports decline sharply due to ADI-imposed shocks; the lowest point at the third month after the initial shock; and do not recover until 24 months later. Simultaneously, the inflation rate decreases. Therefore, the ADI-imposed shock can be regarded as a negative shock on the demand curve where both production and price decrease. In contrast, the ADI-imposing shock generates a different response. The net exports decline, but the inflation rate increases. These can be seen as standard responses with respect to the negative shock on the supply curve. Originality/value - We shed light on the relationship between protectionism and Korea's economic fluctuations, which is rarely addressed in previous studies. We also consider the effects of both protective policy measures on imports to Korea imposed by the Korean government and on policy measures imposed by Korea's trading partner countries on its exports.

• Journal of Korea Trade
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• v.27 no.3
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• pp.199-216
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• 2023

Purpose - This study aims to identify the internal capabilities that export companies need to possess in order to utilize FTAs and to propose ways to expand their export performance through them. To achieve this goal, the study analyzed the internal factors that affect FTA utilization from a resource-based perspective, such as Origin Management Competency, Information Acquisition Competency, contract Management Competency, and Commitment to Export, based on prior research on corporate capabilities in the field of management and FTA-related research. The study ultimately aims to confirm whether a company's FTA utilization contributes to its export performance through the management and response to its internal factors for FTA utilization. Design/methodology - To achieve the research objective, this study conducted a literature review related to FTA utilization and identified the internal factors of companies that affect FTA by classifying them into Origin Management Competency, Information Acquisition Competency, contract Management Competency, and Commitment to Export Based on this, a final research model was developed, hypotheses were set through a preliminary study survey, and conclusions were drawn by analyzing the data of 312 companies. Findings - The empirical analysis results indicate that Origin Management Competency and Contract Management Competency have a positive impact on FTA utilization, while Information Acquisition Competency and Commitment to Export do not have a statistically significant impact on FTA utilization. Based on these findings, this study suggests measures for efficient FTA utilization for companies that want to utilize FTAs. Additionally, FTA utilization has a positive impact on export performance. In other words, the extent to which companies utilize the signed agreements has a positive impact on their performance. Based on these results, this study identifies the characteristics of companies that want to utilize FTAs and proposes measures for future efficient FTA utilization. Originality/value - This study has confirmed that in order for companies to utilize FTAs, they must meet the requirements of the FTA. To this end, the study has concluded that it is important to manage and address internal factors such as Origin Management Competency, Information Acquisition Competency, contract Management Competency, and Commitment to Export to increase FTA utilization. Based on these results, it can be confirmed that it is essential for companies to have an understanding and management of the internal factors that satisfy the requirements of the FTA in order to utilize the FTA.

• Korea Trade Review
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• v.41 no.2
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• pp.123-157
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• 2016

As the WTO·DDA continues to stagnate, mega FTAs such as the TPP will likely play the leading role in rule-making of trade for some time to come, creating a 'spaghetti bowl' of trade rules. FTAs, notably high-standard and broad-based regional or mega-FTAs, are the appropriate means to achieve this objective, because they cover many of the policy measures that are needed for the development of global value chains(GVC). The highest quality FTAs are increasingly adding new features like regulatory harmonization that may also foster GVC growth in partner countries. Complementary relationships among markets along value chains, involving both goods and services, also complicate analysis. This is particularly relevant when thinking about policy, since the traditional tendency to think about policies and regulate markets in unconnected silos can lead to unintended and undesirable results. This paper examines the current states of FTAs to determine which are more likely to push this latest wave of globalization further and faster, and explores the plans that are most helpful for GVC growth.

• Korea Trade Review
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• v.48 no.4
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• pp.47-66
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• 2023

Our study aims to explore the impact of China's foreign trade policy measures on the real exchange rate movement. We seek to provide specific references for the formulation of exchange rate and trade-related strategies. Our results indicate that China's bilateral trade is significantly influenced by movements in the Real Effective Exchange Rate (RER). When analyzing the relationship between aggregated trade flow and exchange rate movements, this paper finds that the depreciation of the real exchange rate leads to an increase in China's export volume and a slight decrease in its import volume. Moreover, China's export volume exhibits higher sensitivity to exchange rate volatility compared to the exchange rate level. Furthermore, the empirical findings regarding disaggregated trade flow suggest that different goods are affected differently by exchange rate movements. Capital goods and consumer goods, being in different stages of processing, show no negative impact on their import and export due to exchange rate depreciation. Consequently, we recommend deepening the industry's reform by improving production efficiency and transitioning the industrial structure to a higher processing stage. This approach can effectively reduce the negative impact of exchange rate depreciation.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.49
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• pp.189-212
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• 2011

As the international business increases among the nations of the world recently, it is an inevitable fact that its claims rise as well. The most reasons of the international business claims have been concentrated upon the unpaid issues. The other reasons are sequently the different interpretation of business contract's conditions, the inferior quality of the goods, the breach of shipping time, the uncertain market-claims and some problems of transportation, the quantity and bad package of the goods. As business transactions grow more complex, it becomes increasingly important to resolve claims as quickly and efficiently as possible. Recognizing the importance of comprehensive policy support for overall international trade and investment of local company in recent years, Korean government has reborn the Korea Insurance Corporation ("K-sure"). K-sure adopted a range of measures to improve management efficiency to strengthen national competitiveness and national economy by promoting oversea trade and investment. Especially, K-sure will be able cover not only export transactions but also import transactions to secure oversea natural resources and commodities vital the national economy. K-sure should be able to continue and expand the existing export insurance programs, support import transactions and lead export-oriented industrialization of Korea as the best trade insurance agency.

• Journal of Korea Trade
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• v.25 no.8
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• pp.25-44
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• 2021

Purpose - This research aims to provide empirical evidence that highlights the importance of imported intermediate goods in long-term economic growth. To this end, this paper develops an index that measures the productivity gains associated with a country's intermediate goods imports using highly disaggregated trade data. Design/methodology - The basic hypothesis is that countries sourcing higher-productivity (or higher-quality) inputs from developed economies derive a larger benefit from foreign R&D. To explore this hypothesis, standard cross-country growth regressions are performed using the highly disaggregated data from the United Nations (UN) Commodity Trade Statistics Database (COMTRADE). To address the endogeneity issue, I apply an instrumental variable (IV) approach. Findings - The results of this study demonstrate that the index predicts subsequent economic growth in middle- and low-income countries. This finding is consistent with previous studies that have argued that developing countries can achieve substantial productivity gains by importing intermediate inputs from developed countries. By contrast, there is no evidence of a significant association between the index and economic growth in high-income countries. Originality/value - This paper contributes to our understanding of the causal relationship between international trade and economic growth. From an economic policy perspective, the results suggest that developing countries with limited technology endowment can boost growth from input-tariff liberalization.

• Korea Trade Review
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• v.47 no.6
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• pp.355-375
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• 2022

In this study, LCA based on EU PAS 2050 and Product Category Rules (PCR) was conducted for steel products with the highest proportion of Korea's exports to the EU among the carbon border adjustment items that were passed by the EU Parliament in June and applied to imports from 2025. Carbon emissions were calculated by (ISO 14040) analysis. As a result of the analysis, the total emission is 394,000 tons, and when converted to the EU ETS weekly price, it is 39,000.000 euros, which is about 5% of the export amount of 734 million dollars. This is the same effect as a 5% tariff increase. This study applies international standards in calculating the carbon footprint and provides information that is closest to the expected amount to be imposed in the future EU CBAM, providing the effect of enabling exporters to establish trade strategies and international competitiveness measures in advance.

• Korea Trade Review
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• v.47 no.3
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• pp.1-16
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• 2022

The purpose of this study is to analyze how Korea's exports amount changed due to COVID-19 and what factors played a role in these changes. We analyze Korea's exports with 40 countries around the world. In analyzing the impact of COVID-19, we estimate the gravity model using international trade data for five years from 2015 to 2019 and and compare the results with those for 2020. Several factors such as mortality, quarantine intensity, industry characteristics are considered for the analysis. The following results were obtained. First, as a whole, exports of Korea decreased significantly to countries with strong containment measures. In addition, Korea's exports (increase further) or decrease less to countries with a large number of deaths and confirmed cases in importing countries. Second, these results were similar in the major industries, classified by HS two units. Exports to countries with strong containment decreased a lot while exports decreased less to the countries with severe COVID19 (based on the number of deaths or confirmed cases). Third, however, different results were obtained in the analysis of reagents and vaccines, which are detailed items directly related to COVID-19. Rather, the degree of containment does not matter for these items, and it seems that Korea exported more to countries to more severe Corona countries.

• Korea Trade Review
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• v.46 no.6
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• pp.127-142
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• 2021

The Pohang Youngilman Port is the only international trade port in the Daegu-Gyeongbuk region, but its cargo throughput has been stagnated since its opening. Finding out ways to revitalize the port has been a big issue in the region, taking its potential business effects on the surrounding areas into consideration. This study, therefore, aimed to critically evaluate the government policies and empirically analyze business environments of the Pohang Youngilman Port as a fundamental to reach solutions for its revitalization. The policy evaluation showed that there are discrepancies in viewing contexts, implementations and mechanisms of the port at each government level, which resulted in implementing various but inconsistent solutions. Also, the interview results were analyzed to point out the fundamental problems, such as limited cargo volume due to weak hinterland development, lack of shuttle shipping between Busan New Port and Pohang Youngilman Port, and lack of large shippers to diverse the shipping network. This study has academic and managerial implications in suggesting measures for facilitation of the Pohang Youngilman Port by amalgamating various viewpoints of governments and stakeholders, which can be used for policy development as well as practical solutions for the port.

• Korea Trade Review
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• v.47 no.1
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• pp.1-12
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• 2022

This study analyzes FCEV among measures to respond to climate change policies. In particular, it proposes alternatives to solve this problem in the trade industry, which relies on transportation sectors with high greenhouse gas emissions such as exports and imports of goods. Therefore, when FCEV is introduced in the transportation sector, changes in CO2 emissions, a greenhouse gas, and changes in logistics costs for changes in CO2 emissions are set through scenarios to evaluate the impact on product trade, such as imports and exports. As a result, the increase in logistics costs due to carbon dioxide emissions affected the import and export volume of goods, and when FCEV was introduced, the export volume would increase by up to 5.6%, and the import volume by up to 30%. In addition, CO2 emissions decreased to about 60% in 2050. Therefore, the introduction of FCEV in the transportation sector will greatly contribute to increasing sales in the trading industry and will be able to solve environmental problems such as greenhouse gas reduction.