• International Area Studies Review
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• v.14 no.3
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• pp.423-453
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• 2010

This study aims at quantifying potential economic effects on the Korean economy of a China-Korea FTA and a Japan-Korea FTA using a dynamic computable general equilibrium (CGE) model. Most of the previous studies on them used static CGE models. Key findings of this study are that a China-Korea FTA would lead to a higher increase in Korea's exports and economic growth than a Japan-Korea FTA and that both a China-Korea FTA and a Japan-Korea FTA would cause additional trade deficits to Korea, which would be minuscule compared to Korea' economic trade volume. Since potential economic impacts on Korea's industry output and exports by sector of a China-Korea FTA and a Japan-Korea FTA are forecast to be complementary, i.e., major sectors which would run trade deficits from a Japan-Korea FTA would run trade surpluses from a China-Korea FTA, a simultaneous pursuit of both a China-Korea FTA and a Japan-Korea FTA would be more desirable and beneficial to Korea. This study shows that a dynamic CGE model which can take explicit account of international capital mobility and ownership is required for more precise estimation of effects of the FTAs.

• International Area Studies Review
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• v.12 no.3
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• pp.419-448
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• 2008

The objective of this study is to conduct a quantitative assessment of potential impacts on the Korean economy of Agreement on Trade in Services Under the Framework Agreement on Comprehensive Economic Cooperation Among the Governments of the Republic of Korea and the Member Countries of the Association of Southeast Asian Nations which was signed on 21 November 2007 using a Computable General Equilibrium (CGE) model. Tariff equivalents of services were calculated on the basis of concessions made in the Agreement between Korea and ASEAN member countries. The empirical analysis shows that Korea is to get an additional gain in real GDP of 0.04 percent and in welfare of US$106 million, with an increase in per capita utility of 0.03 percent. Total exports and imports of Korea are to rise by US$179 million and $191 million, respectively, causing a trade deficit of $12 million. Korea's exports to ASEAN member countries will increase by $108 million and Korea's imports from them will rise by $278 million, giving rise to a trade deficit of $170 million.

• International Area Studies Review
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• v.13 no.3
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• pp.695-728
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• 2009

This study aims to conduct a quantitative assessment of potential economic impacts on the Korean economy of the concessions of the Korea-U.S. FTA (KORUS FTA) which was signed on April 1, 2007 using a dynamic computable general equilibrium (CGE) model, with all sectors, including agriculture, manufacturing sectors and services industry, considered for simulations. In addition, the timing of trade liberalization based on the concessions agreed on in the KORUS FTA talks for all sectors is explicitly considered. Major findings of this study are that Korea' real GDP would rise by 4.67%~4.99% by 2023 and the contribution of liberalization of services trade to Korea's economic growth would be 0.3%~0.62% points. Trade liberalization in service sectors would lead to lowered import prices and an increase in FDI, which are to contribute to an higher output and exports of sectors which make an intensive use of imported inputs and finally a higher economic growth of the Korean economy as a whole. For that to happen, a ratification of the KORUS FTA by the National Assembly of Korea and the U.S. Congress is required.