• 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.

• International Area Studies Review
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• v.16 no.3
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• pp.269-291
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• 2012

Analyzing EU trade laws and institutional systems, the trade policy of EU has been founded, undoubtedly, on common interests for EU members. EU trade policy leaves room for 'Collective Protectionism' by permitting legal persona or interesting group to raise anti-dumping procedures. The anti-dumping policy of EU has shown a protectionism itself and has been affected by political motives. Investigation against anti-dumping can easily open and also there exists a wide range of political involvements. Furthermore, anti-dumping policy could be misused for protecting declining industries, which lost comparative advantage in global market. Economic theories show that anti-dumping measures divert import from outsider into insider members, which finally results in increasing intra-production of EU. This is exactly the reason why the anti-dumping policy has become attractive trade policy.

• East Asian Economic Review
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• v.20 no.3
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• pp.311-338
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• 2016

In the race for establishing trading architecture consistent with new landscape of the global economy, the US is ahead of the game by concluding the Trans Pacific Partnership Agreement with 11 countries. To make it reality, the ratification is essential. In the battle for ratification in the US, declining globalism confronts rising protectionism. This paper models the ratification process as contest between globalism and protectionism, and analyzes the optimal timing for ratification. Based on this framework, various ratification scenarios are analyzed. The paper argues less likelihood for the lame-duck session passage and more likelihood for prolonged and protracted delay, due to changing political dynamics and declining intellectual support for globalism. Hence, the future of Trans Pacific Partnership Agreement may prove different, compared to the North American Free Trade Agreement and the Korea-US Free Trade Agreement, both of which were renegotiated and ratified eventually. Then, the US would lose the first move advantage. The paper also discusses strategic implications of delayed ratification on the evolution of trading architecture in East Asia.

• Asia-Pacific Journal of Business
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• v.7 no.2
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• pp.49-59
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• 2016

The study attempts to investigate the causes of Sino-U.S. trade friction in recent years and provides countermeasures accordingly. The import and export volume of two countries, the product structure of China's export, the 337th Act lawsuits related to China, the industries involved in trade friction, and the G-L Index of Sino-U.S. Products are analyzed in detail. The causes of Sino-US trade frictions are discussed from the aspect of mercantilism and trade protectionism, interest groups and governments' trade policies, Chinese product structure, intellectual property protection in China, and performance of Chinese enterprises in litigation. Based on these, countermeasures are put forward. China needs to implement industrial upgrading, increasing the added value of products, and improving intellectual property protection. A trade friction warning system also needs to be constructed. The Chinese government needs to carry out strategic dialogue and international negotiation.

• Korea Trade Review
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• v.44 no.1
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• pp.177-191
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• 2019

Global trade protectionism has increased further and U.S. priorities and protectionism have strengthened since Trump took office in 2017. Trump administration is actively implementing tariff measures based on U.S. domestic trade laws rather than the WTO rules and regulations. In particular, the American government has recently been imposing high tariffs due to national security and imposing economic sanctions on other countries' imports. According to the U.S. Trade Expansion Act Section 232, the American government imposed additional tariffs on steel and aluminum imports to WTO member countries such as China, India, and EU etc. on march 15, 2018. Thus, this study aims to investigate whether the U.S. Trade Expansion Act Section 232 is consistent with GATT/WTO rules by comparing the legal basis of US / China / WTO regulations related to Section 232 of the U.S. Trade Expansion Act, and gives some suggestions for responding to the Section 232 measure. As the Section 232 measure exceeded the scope of GATT's Security Exceptions regulation and is very likely to be understood as a safeguard measure. If so, the American government is deemed to be in breach of WTO's regulations, such as the most-favored-nation treatment obligations and the duty reduction obligations. In addition, American government is deemed to be failed to meet the conditions of initiation of safeguard measure and violated the procedural requirements such as notification and consultation. In order to respond to these U.S. protection trade measures, all affected countries should actively use the WTO multilateral system to prevent unfair measures. Also, it is necessary to revise the standard jurisdiction of the dispute settlement body and to explore the balance of the WTO Exception clause so that it can be applied strictly. Finally, it would be necessary for Chinese exporters to take a counter-strategy under such trade pressure.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.75
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• pp.117-136
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• 2017

Trade finance services have been played an important role in the Korea trade development history since 1960's. These days the trade environment is confronted by the 4th Industrial revolution and new trade protectionism. So we need to improve the Korea Trade Finance Services in order to improve Korea trade volume. Bank of Korea(BOK) also revised the Rule of Korea Trade Finance in 2014 and enlarged the trade fund for commercial banks where they handle the trade finance to small and medium enterprises(SME) in 2016. This article handle the current state and problems of Korea trade finance services and suggest the improvement measures as follows; First, the commercial banks, which handle trade finance fund, should improve the customs and practice of judge loan for SMEs. Second, the export volume counting rule for trade loan should harmonize between BOK's Rule and Foreign Trade Management Regulation under the Foreign Trade Act. Third, the processing trade and intermediate trade also can use the trade finance like other trade. Fourth, Trade finance should be in balance between export and import finance to defend the new protectionism. It means that the trade finance should expand to import in the certain conditions. Lastly, the related trade promotion agencies and their employees should improve their skills and abilities for handling trade finance.

• Journal of Korea Trade
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• v.23 no.3
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• pp.118-137
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• 2019

Purpose - As global trade disputes intensify and global trade uncertainty increases due to the prevailing trade protectionism all over the world, mega-FTAs such as the RCEP and CPTPP are suggested as strategic trade policy options for export-driven small open economies, such as Korea. This paper aims to provide a comprehensive analysis of Korea's mega-FTA participation and the induced implications for the Korean economy. Design/methodology - We use a multi-region, multi-sector global CGE model, and investigate the different effects of both the US-China and US-EU trade wars on the relative changes in GDP, welfare, and trade under different trade policy regimes; (i) Korea does not participate in any mega-FTA, (ii) Korea participates in the RCEP, and (iii) Korea participates in the CPTPP. Findings - We show, among others, that though industrial effects might be largely varied, the overall enlarging of free trade zones through multilateral mega-FTA participation may contribute significantly to the macroeconomic soundness and stability of Korea, even when global trade protectionism prevails. Under RCEP and CPTPP trade regimes, Korea's GDP may increase even when the global trade environment deteriorates as trade wars occur and intensify between the US and China, or between the US and EU. It is also estimated that RCEP participation increases Korea's GDP, welfare (measured in equivalent variation), and total trade by 1.12%, $1.09 billion, and 2.54%, respectively, while CPTPP participation increases them by 0.19%, $0.92 billion, and 0.13%, respectively. Originality/value - Existing studies usually focus on the direct impacts of mega-FTA participation on macroeconomic variables such as GDP, welfare, and trade, and do not consider the possible buffer effects of a mega-FTA when the global trade environment worsens. In this paper, we analyze and quantify not only the direct impacts of RCEP and CPTPP on the main macroeconomic variables but also the possible buffer effects of the RCEP and CPTPP in the cases of the US-China and US-EU trade wars.

• Korea Trade Review
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• v.48 no.1
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• pp.55-81
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• 2023

The purpose of this study is to analyze the main issues and trends of Korean trade, and to draw implications for future research regarding trade rules. A total of 476 academic journal are analyzed using English keyword searched for 'Trade Rules' from 2000 to July 2022 in the Korean Journal Citation Index data base. The analysis methodology includes co-occurrence network and topic trend analysis which is a kind of text mining methods. The results shows that key words representing Korea's trade trend fall into four categories in which the number of research journals has rapidly increased, which are Topic 4 (Investment Treaty), Topic 7 (Trade Security), Topic 8 (China's Protectionism), and Topic 11 (Trade Settlement). The major background for these topics is the tension between the United States and China threatening the existing international trade system. A detailed study for China's protectionism, changes in trade security system, and new investment agreements, and changes in payment methods will be the challenges in near future.

• Journal of Korea Trade
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• v.25 no.6
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• pp.105-125
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• 2021

Purpose - This study analyzes the effects that the response to the technical barriers to trade (TBT), which are used by various countries as means to restrict imports, exerts on exports at a time when protectionism is emerging in the face of a global economic downturn. TBT has been widely used in developed countries for the safety and protection of their people. Recently, the use of TBT as a tool of protectionism has increased considerably in developing countries as well. Therefore, this study analyzes the South Korean SMEs' response and export performance. Design/methodology - To analyze SMEs' response to TBT and their export performance, this study conducted empirical analysis through statistical analysis. To this end, the research established a theory based on previous research and designed its hypothesis and research model. To verify the hypothesis and research model, factor analysis addressing validity and reliability was performed using SPSS 25 and AMOS 26, and the structural equation model was analyzed. Findings - This study found the causal relationship between the independent variable, the mediating variable, and the dependent variable adopted against the theoretical background to have little or no effect, in contrast with previous studies. In a break from previous studies, all hypotheses were rejected for innovation strategic competencies, one of the sub-factors of the independent variable, which is believed to be a result of the lack of practical research related to TBT. Originality/value - Previous studies performed analysis using trade statistics or macro data. A number of such studies analyzed the relationship between technical regulation and trade volume. This study differs from previous studies in some respects, because it analyzed the export performance of companies by establishing a hypothesis and implementing a research model with the factors analyzed in previous studies. In addition, a new attempt has been made by classifying the TBT response factors into technology competencies, human resource competencies, and innovation strategic competencies, and utilizing technology innovation and the export support system as mediating effects.

• East Asian Economic Review
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• v.22 no.3
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• pp.275-306
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• 2018

Amid a general rise in protectionism and a trade war between the world's two largest economies, this paper analyzes changes in gains from trade for the world over a decade marked by rapid global economic integration preceding the global financial crisis of 2007-08. It employs state-of-the-art quantitative trade models based on the gravity equation to estimate autarky gains from trade, as well as a recently introduced ANOVA-type structural estimation of the gravity equation to obtain trade costs free of residual trade cost bias. Between 1995 and 2006, the cost of moving to autarky increased by about 45% on average. A decomposition exercise suggests most of the increase in autarky gains from trade on average was due to increases in import shares in total spending, with a limited role for reallocations of spending across sectors with varied trade elasticities. Changes in trade costs between 1995 and 2006 are found to have increased autarky gains from trade, as measured in 2006, by up to 100%.