• Title/Summary/Keyword: abolishment of tariff

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The Economic Effects of Oil Tariff Reduction of Korea-GCC FTA based on VAR Model (VAR모형을 활용한 한-GCC FTA 체결 시 원유관세 인하의 경제적 효과 분석)

  • KIM, Da-Som;RA, Hee-Ryang
    • International Area Studies Review
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    • v.20 no.1
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    • pp.23-51
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    • 2016
  • This study analyzed the expected economic effects of the Korea-GCC FTA and sought strategies for industrial cooperation. To see the economic effects of Korea-GCC FTA, we analysed the effect of the oil tariff reduction of economy by Vector Autoregression(VAR) model. The estimation results shows that following the abolishment of the tariff on crude oil imports, GDP, GNI and consumption are expected to grow by 0.212%, 0.389% and 0.238%, respectively. Meanwhile, investment, export and import are estimated to drop by 0.462%, 0.413% and 0.342%, respectively. As for prices, producer prices are to rise by 6.356%p, whereas consumer prices fall by 2.996%p. In short, the Korea-GCC FTA and resultant abolishment of the tariff on crude oil imports followed by the decline in crude oil prices will result in declining prices whilst macroeconomic indices, such as GDP, GNI and consumption, will increase exerting positive effects on domestic economic growth. Also, it is necessary to proactively respond to GCC member states' industrial diversification policies for FTA-based industrial cooperation to diversify the sources of crude oil and natural gas imports for further resource risk management.

General Equilibrium Effects of Trade Liberalization on the Diffusion of Environment-friendly Fuels (관세철폐가 친환경연료 산업에 미치는 일반균형적 파급 효과)

  • Bae, Jeong-Hwan
    • Environmental and Resource Economics Review
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    • v.18 no.1
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    • pp.23-51
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    • 2009
  • This research alms at quantifying economic impacts of free trading policy on environment-friendly fuel industry applying a static general equilibrium (CGE) model for Korea. Theoretically, 'polluters haven' hypothesis had been debated as major issue on the environmental effects of trade liberalization during 1970s and 1980s but recent literature emphasizes that production, scale, structural, and regulatory effects may derive rapid diffusion of environment friendly technologies. In this study, trade liberalization policy affects output of agricultural sectors negatively while that of biodiesel as environment-friendly technology positively. The rise m the output of biodiesel is derived from the reduction in import prices of agricultural products due to the abolishment of tariff. The policy implication from the analysis is that feedstock for producing biodiesel should be exploited in the foreign countries where productivity of agriculture is quite predominant compared to Korean agriculture.

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