• Journal of Korea Trade
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• v.26 no.6
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• pp.41-60
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• 2022

Purpose - The policy implications of free trade agreements have traditionally been a matter of debate among economists. The official signing of the Korea-China Free Trade Agreement provides economists with a quasi-natural experiment to analyze the FTA's policy effects. This article aims to more accurately understand the impact of Korea's FTA accession on the macro economy. Design/methodology - This study adopts the counterfactual method based on panel data to find common factors in the generation process of macro data to fit the counterfactual path, to accurately evaluate the effect of the macro policy. Findings - Our research results show that the signing of the Korea-China FTA has a relatively significant short-term positive effect on Korea's economic growth. On average, Korea's real GDP growth rate has increased by 2.1%. This study finds evidence in support of FTA signing not having a significant impact on Korea's GDP growth in the long run. Additionally, we evaluated the impact of the FTA on Korea's imports and exports and found that it had a significant positive impact in the short term, but the trade effect of the FTA is significantly affected by the external macro-environment. Originality/value - First, this study uses macro panel data at the national level to examine the impact of the Korea-China FTA on Korea, and more accurately describes the policy effect of the FTA. Second, our empirical results show that the Korea-China FTA policy impact is subject to occasional changes in the external environment, such as the geopolitical conflict (crisis) between Korea and China, and the US-China trade war. Finally, the analysis shows that the short-term effect of FTA is significant but the long-term is uncertain, which provides empirical evidence for the debate on whether joining FTA can promote national economic growth.

• Journal of Digital Convergence
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• v.16 no.9
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• pp.115-123
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• 2018

This study aims to analyze the importance of activating factors in the companies operating in the free trade zone of Pyeongtaek Port by using hierarchical analytical decision making method and suggest implications according to the analysis results. As a result of analyzing the importance of the five factors, it was found that most of the companies in the free trade zone of Pyeongtaek Port were aware of the infrastructure factor (0.330), finance and budget (0.223), organization and operation (0.188), manpower (0.119) in order of importance. In detail, the expansion of the route was recognized as the most important improvement. and Manufacturing companies were judged to be a more important factor in improving the entry conditions of manufacturers and strengthening the distribution of value added. In logistics companies, the importance of manpower is higher than manufacturing companies. The implications for the results of the analysis are diversification of route in Pyeongtaek Port, improvement of the infrastructure near the free trade zone, and The need for institutional improvements. Also, in the future, we suggest the necessity of activation research for non - residents.

• East Asian Economic Review
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• v.20 no.3
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• pp.279-309
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• 2016

The proposed Trans-Pacific Partnership (TPP) is a free trade agreement among 12 Pacific Rim countries whose joint gross domestic products (GDPs) account for 36 percent of world GDP and whose mutual trade accounts for approximately 24 percent of world trade. As for most proposed free trade agreements (FTAs), trade economists have provided ex ante computable general equilibrium (CGE) estimates to predict the trade, employment, and real per capita income effects of this agreement, such as ITC (2016). This paper-intended to complement these studies-examines the potential impacts of TPP beyond such traditional CGE estimates, taking a broader economic, governance, and historical perspective. First, we contrast these traditional CGE trade and welfare estimates that treat all firms within an industry as homogeneous with more recent CGE analyses that allow firms' productivities to be heterogeneous. We show that the latter models' trade predictions are much more consistent with ex post empirical evidence of average trade effects of FTAs. Second, empirical evidence now strongly confirms the existence of FTA "contagion." We review this evidence and show that predictive models of the evolution of FTAs indicate that the TPP should be formed. With China now having formed 12 FTAs and negotiating five new ones (including a sixteen member Asia-Pacific FTA), the United States would likely face considerable trade diversion without the TPP. Third, we examine empirical evidence on the likely further economic growth implications of FTAs by reducing firms' uncertainty over trade relations and trade policies. Fourth, we examine empirical evidence on the additional impact of FTAs on consolidating democratic institutions in countries. The TPP would likely help consolidate some of the less mature democracies. Fifth, we examine empirical evidence on the reductions of conflicts (and enhanced peace) between countries owing to the formations of FTAs. We conclude the paper noting that the potential net benefits to member countries of the proposed TPP extend well beyond the real income gains to households based upon traditional CGE models.

• 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%.

• Journal of Korea Trade
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• v.26 no.8
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• pp.58-76
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• 2022

Purpose - This study examined the Rules of Origin (RoO) as a factor affecting free trade agreements' (FTA) utilization and analyzed the causal relationship and the effects of these factors on the export performance of automobile parts companies. Design/methodology - We analyzed and verified the impact of FTA utilization and the export performance of automobile parts companies by dividing the characteristics of the RoO into complexity and uncertainty. Following which, various statistical analyses were conducted on the interrelationships among these variables. Findings - This research analyzed the effect of the RoO factors of complexity and uncertainty on the use of FTA and the export performance of automobile parts companies. We found that these characteristics of RoO were generally related to and affected the FTA use and export performance of these companies. Based on this, this study's investigation into the characteristics of the RoO would then help companies in better utilizing the FTA, as well as providing suggestions on how to effectively respond to the application of the FTA in the future. Originality/value - Companies that want to utilize FTAs in international trade must follow the RoO. In the Regional Trade Agreement (RTA), the country-of-origin is a key factor, with the RoO being an important requirement for the application of preferential tariffs. These regulations are a requirement for receiving FTA preferential treatment; however, they also cause difficulties to companies in using the FTA.

• Journal of Distribution Science
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• v.10 no.12
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• pp.13-17
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• 2012

Purpose - The Asia-Pacific Economic Cooperation (APEC) forum has evolved and is actively facilitating free and open trade. It is debated whether APEC has effectively reduced trade barriers in a preferential manner to encourage liberalized trade and whether increased trade between member countries has reduced trade with nonmember countries. Research designs, data, methodology -This paper empirically tests whether APEC creates or diverts trade, using an extended gravity model with tariff rates, exchange rates, and dummy variables to analyze how APEC affects intra-trade between members.The model utilizes the annual panel data between 1990 and 2007 of 16 selected APEC members and nonmembers. Results - Results reveal the changing role of APEC only between 2002 and 2007 has it created trade, fostering increased trade among trading partners and between members and nonmembers. Conclusion - APEC can be expected to demonstrate a stronger trade creating effect once its advanced and developing members complete tariff reductions by 2010 and 2020, respectively.

• Journal of Arbitration Studies
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• v.17 no.1
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• pp.183-215
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• 2007

The purpose of this paper is to study of WTO regulations related FTA such as Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade(GATT) 1994 and General Agreement on Trade in Service(GATS). In this study, the First introduced FTA rules of WTO in the chapter 2. The WTO agreement includes the "General Agreement on Tariffs an Trade(GATT) 1994". This instrument, known as "GATT 1994", is based on upon the original General Agreement on Tariffs and Trade referred to as "GATT 1947". The Second analyzed the relations between FTA and Article XXIV of GATT 1994 in the chapter 3. The Article XXIV of GATT 1994 is an agreement between the distinctive members for liberalizing trade. The Article XXIV of GATT 1994 is consist of three parts such as customs unions, free-trade area, and interim agreements that WTO is referred to as "Regional Trade Agreement(RTA)". There is a difference between the customs unions and the free-trade area. In the customs unions rules, the members should have the same tarifficatio and the same trade provision against non-members, but in the free-trade are a rules, the member is not necessary to have the same tarifficatio and the same trade provision against non-members. But, the both rules have a liberalization of trade in a common as a revoking tariffs and the government regulations for interfering with trade. In this case, however, the both rules include an inconsistency ele ment under WTO rules such as Most-Favoured-Nation Treatment(MFN) and National Treatment on Internal Taxation and Regulation(NTITR). This study reviewed neither inconsistency nor consistency on the both rules with the RTA of WTO under Article XXIV of GATT 1994. The Third analyzed the relations between FTA and Article V of GATS under WTO in the chapter 4. The GATS is a rule of WTO for the growing importance of trade in services for the growth and development of the world conomy. The GATS is a new rule rather than GATT's rule for concerning goods trade. The Article V of GATS under WTO is a rule that makes based on upon the Article XXIV of GATT. Therefore, If it is to be examined the Article V of GATS, it should be referred to a and an interpretation of the text of the Article XXIV of GATT. However, the Article V of GATS is on the undeveloped stage compare to the Article XXIV of GATT. Because, the statistics of WTO showed that the RTAs under the Article XXIV of GATT have 150 cases completed between nations, but the RTAs under the Article IV of GATS have 10 cases completed between nations. The Forth examined the interpretation of FTA rules under WTO in the chapter 5. Concerning the consistency issue of customs unions and free-trade area under the Article XXIV of GATT, the working parties in customs unions and in free-trade area have been reviewed the consistency is sue which had been not if to GATT. However, the parties finished to get up with one accord the both that are a consistency of argument and an inconsistency of argument with the interpretation of the Article XXIV of GATT. The interpretation of the Article XXIV of GATT has been raised as the issues when EEC by Rome Treaty established in 1957. However, the consistency is sue only agreed 6 working parties out of 69 working parties finished the reviewing of the interpretation up to the end of 1994. Also the consistency issue concerned with the special privilege measure of the customs unions and tree-trade area under the Article XXIV of GATT discussed only 3 cases between working parties up to now and did not accepted as an issue for working parties' report. In conclusion in the chapter 6, this study raised the issues of WTO that are a conference of a new round under WTO and the issues of clarity between FTA rule and WTO regulation.

• International Commerce and Information Review
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• v.16 no.5
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• pp.361-385
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• 2014

This study focused on Spillover of Technology Trade against Post- BRICs of the Technology export of Korea. Therefore this study made an empirical analysis for investigating the competitiveness of technology export in Korea and using panel data 2003-2012 of technology trade data between 6 Countries(Indonesia, Mexico, Nigeria, South Africa, Turkey, Vietnam). In particular, the study deduced the correlation between technology export in Korea using the variables of Gross Domestic Expenditure on R&D and Per capita GDP, distance, population, free-trade index, FDI, Technology-Intensive Manufactures, Pattern Investment fixed effect model in panel linear regression model. It is found that the Technology export of Korea SMEs made a significant effect on the pop, free_trade, and distance. and also it is found that the Technology export of Korea Big Business made a significant effect on the per-GDP, Fdi from Korea, free_trade, and distance. The results suggest that the study should use technology gap variables and the strategy for activating the Technology export of Korea should be made for future works.

• Korea Trade Review
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• v.41 no.2
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• pp.29-60
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• 2016

Research and Development(R&D) investment is an issue of central importance in any economy. In this paper we analyze the relationship between R&D spillovers and trade-related variables, using a two-stage model where duopolists simultaneously decide on R&D in the first stage and engage in Cournot competition in the second stage. We characterized and compared the free-trade and trade-restriction R&D equilibrium in a two-stage game of R&D investment followed by Cournot market competition. We also assessed the impact of varying the R&D spillover on the equilibrium outcomes and tariff. We showed for both free trade and protection cases that there exists a unique symmetric solution(subgame perfect Nash equilibrium). As the solution, while analytical, cannot be stated in closed form, we resorted to numerical experiments to investigate the equilibrium results. Our estimates indicate for both free trade and protection cases that the level of R&D investment and the rate of R&D expenditure decrease as the degree of R&D spillovers increases, and that there is an inverse relation between the degree of R&D spillovers and level of protection. The latter implies that the larger the degree of R&D spillovers, the lesser the level of protection.

• Journal of Contemporary Eastern Asia
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• v.11 no.2
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• pp.27-45
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• 2012

Among political scientists, Japan's free trade agreements (FTA) with member nations of the Association of Southeast Asian Nations (ASEAN) has been considered to be a political tool that can compete against China for regional leadership in East Asia. However, this paper demonstrates that Japan's so-called FTA diplomacy towards ASEAN nations serves the broad interests of Japanese actors in both the political and economic sectors. Given the attention to Japanese domestic political issues, it is argued that diplomacy primarily facilitates a need for free trade with ASEAN and ASEAN markets for Japanese corporations to compete in the global economy and for the government to nurture Japan's stagnant economy by assisting these corporations. This work also contends that the unclear function of FTA as an economic good is due to the lack of the government capacity to effectively manage FTA diplomacy. This partly results from the conventional view with regard to Sino-Japanese rivalry.