• Korea Trade Review
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• v.43 no.5
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• pp.47-66
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• 2018

This study analyzes the potential economic effects of a trade war between the U.S. and China. The CGE model is used to estimate the macroeconomic variables of each country and the change in imports/exports by industry by considering three different scenarios: (i) the US imposes a 25% of tariff on China; (ii) the US and China impose a 25% tariff bilaterally; (iii) the United States expands protection in vehicles and metals to Korea, Japan, and the EU. According to the results of the study, when the US and China initiate a trade war, GDP and welfare of both countries decline. China's decline in GDP and welfare are larger than those of the United States, which implies a trade war is more favorable to the U.S. than to China. In the long run, China's GDP and welfare decline widens further. While the trade volumes of the US and China are greatly reduced, the trade volumes of other countries does not significantly fluctuate. Finally, if the US extends protection policy to Korea, Japan and the EU, it creates undesirable effects on the US. In particular, damage to the US jeopardizes its advantageous position in a trade war with China. In order to emphasize the unfairness of protectionist policy and the damage to Korean industry, Korea needs to establish a strategy to counter US protectionist policy.

• East Asian Economic Review
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• v.25 no.3
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• pp.233-272
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• 2021

The Regional Comprehensive Economic Partnership (RCEP) agreement, signed in November 2020, comes shortly after the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force and the US-China Trade War escalated. We use a computable general equilibrium model to assess the long-term effects of these three developments on income, trade, economic structure, factor returns and employment across the world, and especially in Asia-Pacific countries. The results suggest that RCEP could generate income gains that will be almost twice as large as those of the CPTPP, and that the two agreements together will largely offset the substantial negative effects of the US-China Trade War for the world as a whole. All three policy developments, but especially RCEP, will deepen East Asian production networks and will raise productivity and increase wages and employment in much of East Asia. At the sectoral level, regional trade in non-durable and durable manufactures will experience the most growth.

• East Asian Economic Review
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• v.16 no.2
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• pp.117-137
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• 2012

The objective of this article is to examine the characteristic features of contemporary policy-led regionalism in Asia. It identifies the positive and negative features associated with the free trade agreements that have proliferated in Asia during the first decade of the $21^{st}$ century. There has been a marked transformation in Asia's regional architecture in a short span of a decade-and-a-half. The mode and conduct of multilateral trade has been significantly transformed during recent years and Asia could not possibly remain immune to this transformation. The importance of regionalism in multilateral trade has increased steadily. In addition, the trade-investment-services nexus has developed and grown increasingly important. As business firms now manufacture parts of their products across the border, bilateral trade agreements (BTAs), regional trade agreements (RTAs) and free trade agreements (FTAs) of the contemporary period need to take into account the new kind of trade barriers that have been created due to the changing mode of trade. The contemporary regional agreements need to be designed to facilitate the new modes of conducting business and trade. It was understood rather late in Asia that the 'WTO-Plus' FTAs are more functional and result-oriented than their predecessors.

• East Asian Economic Review
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• v.26 no.2
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• pp.95-117
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• 2022

This paper empirically examines what factors affected the termination of anti-dumping measures in Korea during the 2006-2019 period. Employing a meticulous literature review, the paper investigates the WTO's and Korea's rules on the termination of anti-dumping measures and sets up the related variables in the Cox proportional hazards model. The empirical results show that the GDP growth rate, employment, and trade competitiveness in domestic industries had positive effects on the hazard of the termination of AD measures, while free trade agreements had negative effects. By industry, the hazard of the termination of AD measures was less prominent in the steel industry, while it was more prominent in the machinery industry. These results imply that AD measures in Korea had the properties of a proper trade remedy policy and, at the same time, a protectionism tool to sustain its domestic industries, depending on industrial characteristics and other trade policies.

• Journal of Korea Trade
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• v.27 no.3
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• pp.119-146
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• 2023

Purpose - As the severity of air pollution caused by the shipping industry is becoming evident, port authorities have started making efforts to reduce air pollutants. Considering the limitations of the currently implemented emission-control area (ECA) and vessel-speed reduction program (VSRP), which are narrow in the designation range and navigation behavior of ships, this study proposes an emission-control route (ECR) that can complement the aforementioned two environmental policies. Design/methodology - This study was conducted on Korea-China trade service routes (ports of call) of regular liners. This study employed vessel-specific data, which is from an automatic identification system (AIS), for 1,728 maritime transportations performed by 387 container vessels during one year (July 1, 2021, to June 30, 2022). Performing a scenario analysis, this study analyzed the effectiveness of reduced air-pollutant emissions. Findings - This study found that the implementation of ECRs could increase average voyage time by 12.38%-25.28% but reduced air-pollutant emissions by 29.02%-43.54%. Additionally, the increase in average voyage times reduces the anchorage time of ships outside ports, providing an incentive for ship operators to voluntarily participate in compliance with regulations, thereby contributing to the establishment of a virtuous cycle of air-environmental policies related to ships. Originality/value - This study aims to verify the policy effectiveness by designing an ECR scope for liner trade routes between Korea and China. Therefore, originality and the value of this study includes conceptualizing the ECR system, analyzing its environmental performance, and exploring new policies that can be implemented while complementing existing policies.

• Korea Trade Review
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• v.47 no.5
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• pp.273-288
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• 2022

This study first classifies and organizes provisions on institutional arrangements (or IAs) and dispute settlement mechanism(or DSM) in a digital trade agreement. Then it conducts a case study on seven major digital trade agreements: the CPTPP, the USJDTA, the USMCA, the ASDEA, the RCEP, the KSDPA, and the DEPA. And it finally derives implications for Korea to improve implementation of DTAs by communicating better and resolving disputes efficiently with the help of IAs and DSM-related provisions. IAs of a digital trade agreement can be defined as a set of agreements on the division of the respective responsibilities of agencies involved in implementing and enforcing the agreement, including committees, working groups, or contact points. DSM of a digital trade agreement includes consultation, mediation, arbitration, and establishment of a panel. Comparing six FTAs with an e-commerce chapter, the CPTPP, the USMCA, and the RCEP contain the most advanced type of IA provisions while the CPTPP, the USMCA, the RCEP, and the KSDPA have that of DSM provisions. Korea is its initial stage as it has only signed the KSDPA with Singapore as well as it is about to launch a new digital trade negotiation for the DEPA, the CPTPP, and even the IPEF, it is necessary to engage in negotiations with a clearer position on behalf of Korean digital companies. As provisions on IAs and DSM are important policy tools that can reflect industry concerns and convey proposals in inter-governmental dialogue, a Korean draft of the IAs and DSM-related provision should be prepared in advance.

• East Asian Economic Review
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• v.19 no.2
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• pp.117-142
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• 2015

This paper uses a 53-country 15-industry computable general equilibrium model of trade to analyze the effects of the Korea-China free trade agreement on the Korean economy, the manufacturing sector in particular. The model is based on Yaylaci and Shikher (2014) which uses the Eaton-Kortum methodology to explain intra-industry trade. The model predicts that the Korea-China FTA will increase Korea-China manufacturing trade by 56%, manufacturing employment in Korea by 5.7% and China by 0.55%. The model also predicts significant reallocation of employment across industries with the Food industry in Korea losing jobs and other industries there gaining jobs, with the Medical equipment industry gaining the most. There will be some trade diversion from the ASEAN countries, as well as Japan and the United States.

• Journal of Korea Trade
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• v.24 no.8
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• pp.19-38
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• 2020

Purpose - The Korean government has been promoting the New Southern Policy (NSP) prior to the onset of the COVID-19 pandemic, which damage global value chain (GVC). The purpose of this paper is to emphasize that the NSP should be developed to provide tangible support in corporate GVC adjustment, away from diplomatic activities in order to offset GVC losses due to COVID-19 and expand export capabilities. Design/methodology - Two research methodologies are combined for this paper: A computational general equilibrium (CGE) model is used to estimate the impacts of the COVID-19 pandemic and NSP on Korea's exports, and the decomposition methodology (Wang, Wei and Zhu, 2013) to evaluate the stability of GVC. The conventional CGE model was modified to obtain an estimate for decomposition. The research methodology adopted in this study was attempted for the first time, and it can be widely used in future GVC research. Findings - Results found the effects of COVID-19 reduced Korea's total exports by 27% and GVC by more than 30%. In particular, VA in Korea's exports to the NSP region was found to have a huge impact in heavy industries and textiles, and its exports to Vietnam seemed to suffer the largest loss in GVC among ASEAN countries. If the NSP is implemented properly, it appears that it could offset much of the negative impacts of COVID-19, implying the importance of the effectiveness of the NSP. Originality/value - Many papers have assessed the NSP descriptively, and the GVC has been a topic for many publications. However, the impact of COVID-19 on Korea's GVC with the NSP countries has not been quantitatively studied. This paper emphasizes that the NSP should be pursued based on the results of quantitative analysis. In addition, the research methodology of this paper can be used for other GVC research with relevant modifications.

• International Commerce and Information Review
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• v.8 no.1
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• pp.337-356
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• 2006

The Korea-US dispute on telecom standards has shown the inability of existing trade rules that can be applicable to standardization policy in telecom services sector. It has entailed plenty of dissenting but unsolved trade issues, including legal jurisdiction over technical standards on telecom services and their compatibility with WTO agreements. Question remains how US will cope with this tricky trade puzzle. This paper points out that Korea-US negotiations on telecom standards have provided US with a momentum to think seriously over the necessity of further rule-setting on telecom standards, and FTAs are the rescue train for US to ride on for that purpose. That is to say, US is taking advantage of FTA as a means to promote its national commercial goals by creating trade rules, which seek to deprive its trading partners of regulatory autonomy in telecom standardization. Based upon the research output, it is very important for Korean government in the upcoming Korea-US FTA negotiations to ensure facilitating public policy objectives in telecom standardization as possible as it can, and not to adopt the provision of international standards in the existing US' FTAs.

• International Commerce and Information Review
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• v.11 no.4
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• pp.111-128
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• 2009

As it is expected that change in trade environment has a significant impact on Korean economic growth as well as foreign trade of Korean economy we need an appropriate political response to it. Therefore, this study aims to analyse the Export Competitiveness of IT Industry to China and our trade policy. Korean balance of trade to China in 2007 records surplus of 18.9 billion dollars. However, many experts estimate unfavorable balance of trade will appear from 2010. In consideration of this condition, this study suggests a desirable trade policy for long-term maintenance of current Export Competitiveness between Korea and China. Using TSI and RCA, it analyses a Export Competitiveness of IT Industry to China from 2003 to 2007. To sum up the results, the TSI has been declining since 2005. RCA of semi-conductors has been declining since 2005 while that of communication equipment and computers has been increasing. During the analysis period, the mean RCA of semi-conductors is 55.01, which indicates that its export advantage is somewhat weak, and the mean RCA of communication equipment and computers are 227.22 and 175.83 respectively, which indicates that their export advantage is very strong. Production and export of Korea IT industry have greatly increased in quantity, but its technological quality and diversity have not been satisfactory. In particular, the base of IT industry is growing weaker due to serious dependence of core spare parts on advanced countries and transfer of simple assembly plants to China. To maintain export competitiveness of IT industry, we should pay more attention to technological improvement through more investment to the original technology for local production of core spare parts.