TheoriesandRealitiesofFTA FormationbetweenKoreaandCanada¹€석우.pdf · 2015-04-05 · hensive FTA in accordance with the 24th Article of GATT and the 5th Article of GATS. So far,

Theories and Realities of FTA Formation between Korea and Canada hellip 55

Abstract Korea and Canada have negotiated over FTA formationduring the past several years waiting for the finalization From theKorean perspective there would be some benefits if FTA between Koreaand Canada is formed Based upon the economic and political theories onthe regional economic cooperation Industrial complementarity Canadianexperience of FTA with the United States higher economic developmentlevel and increasing trade volume between the two countries are ex-pected to bring economic and political gains to Korea However somesensitive sectors and negotiation over automobile trade will be barriers tofinalize the negotiation process To expedite the negotiation processsome strategies can be taken Internal consensus-building and exclusionof some sensitive sectors will be good policy instruments to overcomeexisting barriers

Theories and Realities of FTA

Formation between Korea and Canada

Seokwoo Kim(Department of International Relations Seoul University)

Korean Social Science Journal XXXV No 2(2008) 55~78

Key words Free Trade Agreements Trade Creation Trade Diversion Gravity Model

Domestic Politics International Negotiation Sensitive Sectors

56 Seokwoo Kimhellip

Ⅰ Introduction

It has become clearer that ldquopursuit of regionalism has becomenot a matter of choice but a matter of survivalrdquo1 As countrieshave competitively pursued regionalism they also began to worryabout being left behind the competition The core of this new re-gionalism is regional economic cooperation Regional economic ar-rangements are basically discriminatory in a sense that membercountries get preferential treatments Therefore being left out ofregionalism means economic losses unless a country has no in-ternational economic sector2

With the increase in economic regionalism each country facestwo important choices One is related to the direction and thestrategy of a countryrsquos overall foreign economic policy In select-ing a point between autarky and complete openness each countrywill adopt a certain strategy to get to a specific point in thatcontinuum A country may pursue multilateralism regionalismand or unilateralism in adopting its strategy The second is thatif a country joins competition for regionalism it has to decidewith whom it will pursue economic regionalism It also has to de-cide the number of partner countries for regionalism In selectingpartners for regionalism a country has to consider goals strat-egies types and depth of regionalism That is a country has toconsider both economic and political goals and both domestic andinternational goals A country has to consider its strategy to ach-ieve defined goals A country may choose between bilateral andminilateral regionalism A country also has to consider whether it

1 Minister for Trade MOFAT March 25 20052 Seokwoo Kim ldquoThe Political Economy of FTA Formation between Koreaand Japan From the Korean Perspectiverdquo The Korean Journal of AreaStudies 24-2 2006 p 278


will confine regionalism to trade issues or it will expand econom-ic integration to finance money and or investment Regionalismmay also result in political and military integration3

Policy contents and directions on these issues are decided byconsideration on resources possessed by a country A rich andlarge country may be better equipped with resources to deal withthese issues A poor and small country will face serious limi-tations in pursuing diverse types of regionalism Therefore suc-cess or failure of regionalism and its outcomes will be decided byexpected costs and benefits of regionalism for a country and ca-pacities possessed by that country4

At the beginning of 2005 Korea adopted a rather ambitiousgoal in regionalism issues The Korean government at that timeannounced that it would pursue as many FTAs(Free TradeAgreement) as possible within a short time span At the begin-ning of 2005 the Korean government set up four policy goals indiplomacy5 One of those goals is to be an advanced trading statein the near future As one strategy to achieve this goal theKorean government decided to pursue regionalism more actively

However this announcement was somewhat surprising Beforethe Korea-Chile FTA which was finally realized in 2004 Koreawas the one of the only two WTO member countries in the worldwhich didnrsquot have any FTAs with foreign countries6 Even thoughKorea finalized negotiations on FTA with Singapore and EFTAKorea is still far behind in the competition toward regionalismDespite some efforts Korea has been unable to reach an FTAagreement and ratify it with any of its major trading partnersThe fact might mean lack of capacity and or will to pursue ac-tive regionalism in Korea Then it is questionable whether the

3 Ibid p 2794 Ibid p 2795 MOFAT March 30 20056 The other country is Mongolia


Korean government can overcome obstacles to regionalism in thecoming years

Despite some obstacles this type of Korean FTA strategy hasbeen continuing At the beginning of 2006 MOFAT (Ministry ofForeign Affairs and Trade) of Korea once again adopted ldquoeconomicdiplomacy for an advanced trading staterdquo as one of the Koreanforeign policy priorities7 The core of this policy strategy is tofinalize as many FTAs as possible in a short time span Basedupon this policy continuity Korea and Canada began FTA nego-tiation in 2005 and recently Korea and the United States final-ized their FTA negotiations waiting for ratification by theircongresses As for now itrsquos not clear whether these negotiationswill be ratified in the near future But one clear thing is thatKorea has become more active in pursuing regionalism Korea isnegotiating over FTA with European Union and other countrieslike Mexico and India The success or failure of this strategy willbe decided by both economic and political factors

The major purpose of this study is to investigate desirabilityand feasibility to pursue an FTA with Canada from the Koreanperspective At the 12th APEC Summit Meeting in November2004 in Santiago Chile Korea and Canada discussed FTA issuesbetween the two countries The first preliminary meeting washeld in Seoul in January 2005 to assess the possibility of FTAand the second preliminary meeting was held in Ottawa inMarch 2005

At the first preliminary meeting the two countries recognizedthat Korea-Canada FTA would bring gains to both countries Atthe 2nd meeting the two countries discussed details of FTA suchas trade in goods customs clearance rules of the origins trade inservices investment issues etc Both countries agreed that theFTA would be finalized by the year 2006

7 MOFAT February 27 2006


Based upon these preliminary meetings trade ministers ofKorea and Canada agreed on July 12th 2005 that the two countrieswould begin official FTA negotiation and that the first one wouldbe held in Seoul in July 2005 At the July meeting Korea andCanada agreed that the two countries would pursue a compre-hensive FTA in accordance with the 24th Article of GATT and the5th Article of GATS So far there have been 12 official FTA nego-tiations between Korea and Canada and more negotiations arenow under way Even though Korea and Canada wanted to final-ize their FTA negotiations by the end of 2007 the goal was notrealized because of some unsolved disputes over automobile tradeKorean restrictions on beef imports from Canada and Gaesung-related sensitive issues In this paper we will assess the possi-bility of FTA formation between Korea and Canada and will dis-cuss what kinds of obstacles are in the way to the finalization ofnegotiation

This paper is organized as follows In the second section wewill discuss regionalism issues in East Asia In the third sectionwe will introduce political and economic theories on regionalismespecially on FTA In the fourth section based upon the existingtheories we will assess desirability and feasibility of FTA for-mation from the Korean perspective In the fifth section we willdiscuss current issues between Korea and Canada which may playas accelerating or disturbing factors for FTA formation Finally inthe conclusion we will propose some policy measures to over-come existing obstacles to FTA formation between Korea andCanada

Ⅱ Economic regionalism in East Asia8

8 This section on economic regionalism in East Asia is originally from KimSeokwoo 2006 pp 280-283


As itrsquos well known East Asian countries have been far behindother regions in terms of regional economic integration The het-erogeneity of states hegemonic competition between Japan andChina strong tie to the United States under-institutionalization ofinternal consensus-building mechanisms lack of a strong andcentralized regional institution deep mutual distrust and the his-torical authoritative international order in East Asia have beenpointed out as major obstacles to economic integration in theregion9

Despite these obstacles there have been some movementstoward regionalism from East Asian countries Several factors af-fected the policy change in East Asian countries First regionaleconomic integration has rapidly widened and deepened in otherregions in the world Even the United States which had long pre-ferred a multilateral free trading system adopted a so-calledlsquomulti-trackrsquo trade policy10 Second economic globalization makesstates more concerned about economic efficiency to survive en-hanced competition in the world economy Because one of the ex-pected gains from regional economic integration is efficiencygains states competitively try to pursue regional integrationThird the international structural change from the ldquobipolarrdquo sys-tem to the ldquounipolarrdquo one is expected to create political and eco-nomic competition between regions11 If one ultimate goal of eco-

9 Werner Pascha ldquoEconomic Integration in East Asia and Europe-A Com985088parisonrdquo presented at the Conference organized by Seoul ASEM Istitutefor International Relations Seoul Korea Dec 2 2003 Seokwoo KimldquoTheoretical Foundations for East Asian Regionalism Desirability andFeasibilityrdquo presented at the 1st Joint International Conference Le HavreFrance May 19 2004 Young Jong Choi ldquoEast Asian Regionalism andSouth Korearsquos FTA Strategyrdquo The Korean Journal of International Relations44-5 2004 pp 85-108

10 Seokwoo Kim 200411 For hegemonic struggle and related issues see William Pfaff ldquoThe Ques985088


nomic integration is more cooperation in political and military af-fairs itrsquos a rational strategy for states to begin with economicintegration Fourth it has been reported that members of regionaltrade arrangements have economically gained from existingarrangements12 Fifth the problem of ldquoshallowrdquo and slow in-tegration within the WTO has made many countries shift theirpolicy to regional economic cooperation And even more as somecountries began to use FTA formation as a strategy to enhancetheir bargaining position in multilateral trade negotiations withinthe WTO East Asian countries also adopted FTA as one of theirimportant strategies to improve their bargaining positionvis-a-vis other countries in international fora

Even though regional economic integration has become moreattractive region-wide integration in East Asia has not been welldeveloped Instead countries in the region have pursued bilateraleconomic integration Bilateral FTAs are more feasible than othertypes of economic integration The following table shows the re-cent list of FTAs pursued by East Asian countries

tion of Hegemonyrdquo Foreign Affairs 80-1 Jan Feb 2001 pp 221-232 SamuelP Hungtington Foreign Affairs 78-2 MarchApril 1999 pp 35-49

12 For example itrsquos reported that trade between Korean and Chilehas in-creased by 56 within a year after FTA between them was implementedin 2004 See MOFAT March 29 2005


Table 1 Partial List of Free Trade Agreements (FTAs) by East Asian Countries　

Intra-Regional FTAs StatusYear(proposed or

implemented)

AFTAKorea-Japan

EAFTA(ASEAN+3)Korea-ThailandASEAN-China

Korea-China-JapanSingapore-JapanKorea-SingaporeJapan-ThailandASEAN-JapanASEAN-Korea

Singapore-MexicoJapan-MexicoASEAN-CER

Singapore-AustraliaSingapore-Chile

Korea-New ZealandJapan-Chile

Korea-MexicoKorea-AustraliaJapan-Canada

Singapore-New ZealandSingapore-Canada

Korea-United StatesSingapore-United States

Korea-ChileKorea-Singapore

Korea-EFTAKorea-Canada

Korea-United States

implementedjoint studydiscussionjoint study

under negotiationjoint studyimplementedjoint studydiscussionjoint studydiscussion

under negotiationunder negotiationunder negotiationunder negotiationunder negotiation

joint studyjoint studydiscussiondiscussiondiscussion

implementedunder negotiation

discussionimplementedimplementedimplementedimplemented

under negotiationfinalized

199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007

As we see in Table 1 there has been rapid increase in FTAproposals by East Asian countries However only a few of themhave been finalized The fact implies that FTA formation is not aneasy task and that it takes long time for states to agree upon the


final document Table 1 also shows that there have been manydiscussions and joint studies on FTA done by Korea Howeveronly three of them (Korea-Chile Korea-Singapore Korea- EFTA)were implemented Korea has lots of obstacles to overcome topursue economic integration with more countries Therefore be-fore pursuing FTAs with foreign countries each country has toconsider expected political and economic gains and losses fromFTA formation And calculations of gains and losses have to bebased upon theories on FTA We now turn to the existingtheories

Ⅲ The Theories on FTA13

There are at least four theories on the selection criteria forFTAs Two of these are economic theories and other two theoriesare political theories The first economic theory is originally pro-posed by Jacob Viner and later developed by J E Meade R GLipsey and H G Johnson and others14 According to the theoryFTAs or RTAs (Regional Trade Agreements) will have both tradecreation effects and trade diversion effects And the size of tradecreation and diversion will be decided by the structure of com-parative advantage among FTA member states That is if in-dustrial structures of FTA member countries are complementaryto each other involving countries can expect economic gains fromtrade creation effects Meanwhile if many of their industries arecompeting each other trade creation effects will be small The de-gree of complementarity or competition depends largely on factorendowments

The second economic theory is called the lsquogravity modelrsquo15

13 This section on the existing theories was originally in Seokwoo Kim 200414 Jacob Viner The Customs Union Issue New York Carnegie Endowment

for International Peace 1950


The model proposes that economic size distance population sizeand GDP per capita affect the possibility and desirability of FTAformation According to the model large developed and adjacentcountries are fascinating FTA partners because FTA in this casewill expand business opportunities in larger markets and becausefirms can utilize the economy of scale In addition to these com-mon languages and cultural similarities are regarded as importantfactors which facilitate lsquonaturalrsquo trading blocs

One of the political theories on FTAs focuses on domesticpolitics The theory argues that preferences interests and de-mands of some organized interest groups decide direction andcontents and public policy including the FTA policy Contributionand votes can be exchanged for certain policies According to thetheory a government political stance will reflect the relative po-litical power of organized special interests and also the extent ofthe governmentrsquos concern for the plight of the average voter16Robert Putnam would rather regard these situations as involvingtwo distinct stages of strategic interaction One is internationalnegotiation between states over possibility and contents of FTAThe other is domestic negotiation between the government andinterested groups over ratification17 In this situation autonomy of

15 Chan-Hyun Sohn and Jinna Yoon ldquoDoes the Gravity Model Fit KorearsquosTrade Patternsrdquo KIEP Working Paper 01-01 2001 Gilbert John et alldquoAssessing Regional Trading Arrangements in the Asia-Pacificrdquo UNCTADPolicy Issues in International Trade and Commodities Study Series No15 UN 2001

16 Anne Krueger ldquoPolitical Economy of the Rent-Seeking Societyrdquo AmericanEconomic Review 64-3 1974 pp 291-303 Stephen P Magee William ABrock and Leslie Young Black Hole Tariffs and Endogenous Policy TheoryPolitical Economy in General Equilibrium New York Cambridge UniversityPress 1989

17 Robert Putnam ldquoDiplomacy and Domestic Politics The Logic of TwoLevel Gamesrdquo International Organization 43-3 1988 pp 427-60 Gene


the government election procedures the level of democracy andother political institutions will be major variables in deciding theviability of FTA formation

The second political theory is about international politicsAccording to the theory in selecting FTA partners states have toconsider power distribution between states the level of economicinterdependence externalities of trade on security trade im-plications on other issues such as human rights and democracyand general diplomatic relations18 For example the theory arguesfor formation of FTA with alliances and democratic partners tominimize external diseconomy on security and to reduce risks ac-companied with international businesses

Overall all these economic and political theories on FTAs areabout desirability and viability(or feasibility) of FTA formationFor example to secure economic gains states need to search forFTA partners which are differently endowed and nearly locatedbig-rich states But to secure domestic political support and tomaintain social stability states need to seek for FTA partnerswhich are similarly endowed and small states On the other handto promote international political purposes states have to searchfor democratic alliance countries as FTA partners The problem isthat economic purposes and political purposes are competing eachother in many cases Also in other cases domestic political pur-poses and international political purposes are in conflict In shorteconomic desirability and political feasibility are often in conflict

M Grossman and Elhanan Helpman ldquoThe Politics of Free-Trade Agree985088mentsrdquo American Economic Review 85 1995 pp 667-690

18 Joanne Gowa Allies Adversaries and International Trade PrincetonPrinceton University Press 1994 Edward D Mansfield ldquoAlliances Preferen985088tial Trading Arrangements and International Traderdquo American PoliticalScience Review 91-1 1997 pp 94-107 Karen L Remmer ldquoDoes DemocracyPromote Interstate Cooperation Lessons from the Mercosur RegionrdquoInternational Studies Quarterly 42 1998 pp 25-52


in the FTA negotiation processes If this is the case what is theoptimal combination of these two values and which countries arethe best as FTA partners And what do these theories on se-lection criteria tell about feasibility and desirability of FTA for-mation between Korea and its potential trading partners

Ⅳ Feasibility and Desirability of FTA from the

Korean Perspective

In this section we will empirically investigate feasibility anddesirability of FTA formation between Korea and its potentialtrading partners Based upon the theories above mentioned wetried to extract as many as variables to assess feasibility and de-sirability of FTA between Korea and its potential trading partners

The following table shows political and economic indicators onKorean and its potential FTA partners To discuss the gravitymodel the population size the GDP size and the GNI per capitaof the countries are investigated To see aspects of internationalpolitics we investigate the democracy level of the countries Inaddition to these variables we included two other variables aver-age tariff rates and existing bilateral FTAs of the countries Theexisting average tariff rates will show how much economic gainsare expected from FTAs That is if existing tariff rates are highcountries can expect more economic benefits from FTA The var-iable is indirectly related to the feasibility of FTA formation be-tween the countries The countries who had an experience in FTAformation are more likely to repeat it It also implies that therewas no fierce domestic opposition to FTA formation in the pastData for these variables are shown in the following table


Table 2　Political and Economic Indicators on Korea and Its Potential FTA Partners

Korea China Japan Singapore Thailand USA AustraliaNew

ZealandMexico Canada Israel Chile

Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160

GDP (bil$) 6797 16(tril) 46(tril) 1068 1635 117(tril) 6316 997 6765 9798 1175 941

GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910

Exports fromKorea (mil $)

45432 17660 5359 2868 30129 2713 539 2711 2469 722 907

Exports toKorea (mil $)

28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8

Average TariffRates ())

79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2

1) ldquoDistancerdquo in the table is the mileage distance between the capital cities Data Sourcewwwindocomdistance

2) The data for population GDP GNIPC are for the year of 2005 Data Source WorldDevelopment Report 2005 World Bank

3) The data for of industrial and agricultural goods are for the year of 1999 DataSource World Development Indicators 2001 World Bank

4) The data for the average tariffs of the most countries are for the year of 2005 DataSource World Development Indicators 2005 World Bank

5) The Democracy Level ranges from 2 to 14 2 represents the most democratic countrywhile 14 represents the least democratic country Data Source FREEDOM HOUSE

Because the above table is much complicated itrsquos hard toevaluate expected gains and costs of FTA formation with compar-


ison to each other However we can simplify it as follows Forexample according to the table if Korea pursues economic gainsfrom FTA China Thailand and Mexico are good FTA partners interms of industrial complementarity Next to these countries theUnited States Canada Australia seem to be an attractive FTApartner for Korea China and Japan are attractive partners interms of both geographical location and the market sizeHowever in the process of FTA negotiation pursuit of FTA withthe United States Australia New Zealand Thailand and Chinawill face fierce domestic opposition from the agricultural sectorWhen international political concerns are involved ChinaSingapore and Mexico are not ideal FTA partners In addition tothese overall analyses we can evaluate expected economic andpolitical gains of FTA with each country

For example China is one of the ideal FTA partners to Koreaif we consider only economic issues The huge population sizegeographical vicinity and the big domestic market of China are at-tractive things for FTA formation In terms of the export and im-port volumes China is one of the most important trading partnerof South Korea Even more the volume of exports and importshas increased very rapidly in the past several years This impliesthat FTA formation between South Korea and China will expandboth export and import markets in both countries much moreSouth Korea can also expect lots of economic gains from FTAwith China if most of the Chinese tariffs on imports from Koreaare removed Because China maintains relatively high average tar-iff rates removal of those tariffs will bring lots of economic gainsto Korea

However the facts that China is still a not-democratic coun-try and that China has no experience in FTA yet are negativefactors in the process of FTA negotiations And because China isan official military ally of North Korea South Korea has to con-sider external diseconomy of FTA with China on its own security


In sum FTA negotiation process is a complicated one be-cause Korea has to consider both economic and political issues atboth domestic and international levels Even more if Korea pur-sues several FTAs simultaneously it will make the problem evenmore complicated

Ⅴ The Political Economy of FTA between Korea

and Canada

We can find several backgrounds for pursuit of FTA betweenKorea and Canada First both Korea and Canada are highly de-pendent on foreign economic sectors in their GDP The total tradevolume over GDP exceeds 60 in both Korea and Canada andthen the two countries have recently pursued bilateral and multi-lateral trade liberalization to secure foreign markets for theirproducts

Second as the recent DDA(Doha Development Agenda) tradenegotiations have faced diverse obstacles to finalization manycountries have shifted their policy priority to regionalism ratherthan multilateralism Both Korea and Canada also realized thatthey needed more regional cooperation to cope with the worstscenario where DDA negotiations turn out to be a failure

Third based upon complementarity of industrial structuresKorea and Canada recognized that FTA would be a good chance tostrengthen economic cooperation between the two countriesKorea has international competitiveness in the manufacturing sec-tor while Canada has international competitiveness in the servicesector some high-tech industries and production of naturalresources

Fourth Korea recognized that it could use Canada as a base topenetrate into the North American markets and Canada also rec-ognized that it could use Korea as a base to penetrate into the


East Asian markets With FTA between Korea and Canada bothcountries can diversify their foreign markets and reduce theirtrade dependence on a few trading partners

From the Korean perspective there are several policy goals tobe pursued from the FTA with Canada First after FTAs withChile in South America with Singapore in Asia and with EFTAin Europe Korea can have one FTA trading partner in NorthAmerica Then the FTA with Canada has symbolic importanceEspecially if the Korea-Canada FTA is finalized and ratified pri-or to the Korea-US FTA its symbolic importance would be moresignificant

Second Canada is the 8th largest economy in the world and amember of G8 Therefore with the FTA with Canada Korea maycapture a good chance to express its strong will for economic re-forms and liberalization19 This policy is expected to bring inmore foreign investments and technological cooperation not justfrom Canada but from other countries

Third Korea expects that the FTA with Canada may upgradethe Korean economy by improving structural inefficiencies of theKorean industry It is also expected that trade liberalization inservice sectors will enhance adaptability and competitiveness ofthe Korean service industries In addition to these expected gainsKorea can secure stable sources of many natural resources suchas oil uranium nickel iron gold copper woods coal etc

Finally it is expected that Korea may learn from Canadianexperiences in FTAs Especially Korea can learn much from theCanadian FTA experience with the United States because Koreaalso pursues FTA with economically much larger countries such asthe United States Japan and China20 Canada has enjoyed more

19 Yeonho Lee Public Hearings on Korea-Canada FTA KIEP July 200520 Myungsoon Shin and Yeonho Lee ldquoCanadarsquos Position on NAFTA and Itrsquos

Implication on Korea-Japan Free Trade Agreementsrdquo Yonsei University


trade and foreign investments with the United States and Mexicothrough the NAFTA But NAFTA also had an effect of reducingCanadian trade with countries outside the bloc For example infact trade between Canada and the East Asian countries has de-creased after the establishment of the NAFTA21 Therefore fromthe Korean perspective it may learn from the Canadian experiencehow to maximize benefits of FTA and minimize costs of FTA withlarger countries22

Also domestic political struggles in Canada during the nego-tiation process over NAFTA may give some lessons to the Koreangovernment Despite domestic oppositions to NAFTA such as lossof the economic autonomy possibility of increase in the un-employment rate more dependence on the United States in eco-nomic operation loss of the market outside the bloc and econom-ic political and social costs accompanied with economic adjust-ments major supporters for NAFTA like the Canadian govern-ment scholars equipped with neo-liberal economic theories andbusiness people made it possible to finalize the NAFTA23 Theexactly same domestic politics occurred in Korea when it nego-tiated FTA with the United States And Korea expects the samesituation when it pursues FTA with Japan and China in thefuture Therefore the Korean government may learn from theCanadian experience how to overcome obstacles toward FTA andhow to manage domestic politics inside Korea

Based upon the data shown in Table 2 itrsquos hard to concludewhether Canada is a good FTA partner for Korea in comparisonswith other countries Relatively big Canadian markets the highper capita income level and the industrial structural differences

200221 Kap-young Jeong and Yeonho Lee ldquoNAFTA and Canada-Korea Relationsrdquo

The Korean Review of Canadian Studies 200022 Shin and Lee 200223 Shin and Lee 2002


are economically attractive factors for FTA formation from theKorean perspective But geographical location and the relativelylow existing average tariff rates can be seen as negative factorsMore FTA experiences of Canada and the higher level of democ-racy of Canada are politically attractive factors for FTA formationfrom the Korean perspective However Canadian agricultural andmarine exports can be a serious economic and political concern inKorea because itrsquos very likely for the Korean government to facefarmersrsquo and fishermenrsquos opposition to the FTA in the negotiationprocess

Even though we cannot know the exact benefits and costs ofFTA between Korea and Canada some anticipations are based justupon the static analyses considering only short-term effects ofelimination of existing tariffs and trade creation and diversion Ifthe analyses are extended to dynamic dimensions which includeinvestment effects and efficiency gains from the economy of scaleand specialization both Korea and Canada are expected to gainsubstantially from FTA between two countries For example theKIEP (Korea Institute for International Economic Policy) esti-mated expected effects of the FTA between Korea and Canada asfollows

Table 3　Estimated Economic Effects of Korea-Canada FTA (unit mil U$)

welfareincrease()

welfare increasein mil $

GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)

Even though both Korea and Canada expect substantial eco-nomic gains from the FTA there are also several hot issues whichmay play as obstacles to the finalization of FTA between the twocountries First Canada is a member of the Cairnes Group and


then one of the target sectors in the negotiation process would bethe agricultural sector in Korea The past experience of theKorea-Chile FTA negotiation shows that there would be a fierceopposition from the Korean farmers and this would be one of themajor obstacles In addition to the Korean agricultural sectorthere are sensitive sectors in both countries Therefore in the ne-gotiation process both countries have to come up with ways tosolve the problems related to the sensitive sectors

Second some of the existing Canadian FTAs include labor andenvironmental issues The Canadian government may want to ap-ply the same labor and environmental standards to the FTA be-tween Korea and Canada The way of coping with these issues inthe negotiation process may affect the success or failure of theFTA between Korea and Canada

Third Korea needs to prepare measures to induce more in-vestments from Canada and to expand its outward foreign invest-ments to Canada Compared to the trade volume between Koreaand Canada the foreign direct investment volume is much smallerbetween the two countries To multiply the positive effects of theFTA both countries need to agree upon institutionalization of bi-lateral investments

Fourth Korean exports of products from the North KoreanGaesung industrial complexes to Canada may be a hot issue in thenegotiation process The Korean government wants Canada totreat those products as Korean products However Canada mayoppose to the idea for both economic and political reasons

Finally as were seen in the negotiation processes Canadianauto workersrsquo opposition to the Korea-Canada FTA plays as onemajor obstacle to finalization of the FTA

In sum it is expected that the Korea-Canada FTA wouldbring economic gains to both countries However Korea andCanada may face some oppositions to the FTA in the negotiationprocess Also there are some hot issues to be overcome The


success or failure of the FTA between Korea and Canada dependson how both governments manage the contending issues

Ⅵ Conclusions

In year 2005 the director of the Trade Research Institute atthe KITA (Korean International Trade Association) provided fivestrategies in pursuing FTAs simultaneously First is that Koreahas to pursue FTAs with big countries to maximize economicgains For example FTA with the United States is recommendedSecond is that Korea has to pursue FTAs with ldquostrategicrdquo coun-tries located in different continents to make a basis for moretrade in the future Third Korea has to pursue as many FTAs aspossible simultaneously He argues that the strategy will enhancethe Korean bargaining position vis-a-vis other countries Fourthin pursuing FTAs long-terms industrial policies have to beconsidered Fifth the Korean government has to be equippedwith the master plan for long-term structural adjustment24

Even though these strategies seem to be valid ones we needto be more concerned about its feasibility There are some ob-stacles in adopting those strategies for more regional economicintegration First internal consensus mechanisms are still lackingin Korea Second because many of the small and medium in-dustrial sectors are still very uncompetitive in the world marketeconomic integration through regional trading arrangements mayseriously harm those sectors Considering that structural adjust-ments need time and resources it may not be a good idea to pur-sue many FTAs simultaneously Third the agricultural sector inKorea has been a major opposition to FTAs Without hugeamounts of financial incentives farmers in Korea will stick to op-position to FTAs especially with food-exporting countries

24 The Chosun Daily Feb 22 2005


Fourth increase in the number of FTAs causes lots of admin-istrative costs and rules of the origin problems25 Without thesolution of these problems more FTAs may result in more con-fusion and chaos Finally there is a ratification problemConsidering the fact that many congressmen in Korea opposed toKorea-Chile FTA it seems to be a difficult task to get ratificationfor many FTAs simultaneously

Political feasibility is a quite a different thing from economicdesirability In pursuing regional economic integration both politi-cal feasibility and economic desirability have to be consideredEven though the Korean government recently announced a veryambitious goal in FTA issues its realization is not guaranteedThere are so many obstacles to be overcome We need more timeto assess whether the goal is attainable

It will be useful to consider how we can overcome theobstacles We can come up with several things26 First institu-tional change may be needed in a way to give more autonomy andpower to the government administration for example the maintrade negotiation authority By this severe bureaucratic politicscan be lessened and also the government can be freer from pres-sure groups The government has to play a role of a so-calledlsquorational dictatorrsquo which pursues national interests rather thansectoral or parochial interests27

Second there must be a change in culture in Korea Culturerefers to a set of beliefs attitudes ideologies and norms in asociety Korea and its people have adopted a kind of mercantil-istic culture in their international trade relationship for a very

25 Maurice Schiff and L Alan Winters Regional Integration and DevelopmentThe World Bank 2003

26 The following policy recommendations are originally from Seokwoo Kim2006 pp 292-293

27 Seokwoo Kim The Political Economy of International Trade Hanul 1998


long time28 Many people in Korea always think that the ulti-mate goal of any trade policy is to secure trade surplus by anymeans This is not a good policy and this kind of mercantilisticpolicy and thinking cannot be accepted by major trading partnersAll of the related sectors including business government andmass media need to change their thought on trade in a way toadopt more liberal orientation The role of mass media is im-portant in educating people

Third regional and bilateral trade agreements typically ex-clude a few politically sensitive sectors and specify prolongedphase-in periods for some others29 Korea and Canada need toutilize this option in a process of FTA negotiations By this thesecountries can secure economic interests related to FTA withouthurting critical domestic political interests

In lieu of conclusion itrsquos very evident that the futureKorea-Canada FTA will bring overall benefits to both Korea andCanada Therefore two countries must make every effort to fi-nalize the FTA negotiation Itrsquos not very clear whether the Koreangovernment will pursue ratification of the Korea-Canada FTAprior to the Korea-US FTA If the Korea-US FTA is ratified byboth governments it will be much easier for the Korean govern-ment to get ratification for the Korea-Canada FTA Howevereven when the Korean government seeks for ratification of theKorea-Canada FTA prior to the Korea-US FTA itrsquos clear thatthe task would be much easier to be done than ratification of theKorea-US FTA Itrsquos time for both Korea and Canada to finalizethe FTA negotiation processes

28 Frederic C Deyo ed The Political Economy of the New Asian Industria985088lism Ithaca Cornell University Press 1987

29 Gene M Grossman and Elhanan Helpman ldquoThe Politics of Free-TradeAgreementsrdquo American Economic Review 85 1995 pp 667-690


References

Bergsten C Fred Competitive Liberalization and Global FreeTrade A Vision for the Early 21st Century Working Paper No96-15 Institute for International Economics 1996

Choi Young Jong ldquoEast Asian Regionalism and South Korearsquos FTAStrategyrdquo The Korean Journal of International Relations 44-52004

Deyo Frederic C ed The Political Economy of the New AsianIndustrialism Ithaca Cornell University Press 1987

Ethier Wilfred ldquoRegionalism in a Multilateral Worldrdquo Journal ofPolitical Economy 106 1998

Gilbert John et al ldquoAssessing Regional Trading Arrangements inthe Asia-Pacificrdquo UNCTAD Policy Issues in International Tradeand Commodities Study Series No 15 UN 2001

Gowa Joanne Allies Adversaries and International Trade Prince985088ton Princeton University Press 1994

Grossman Gene M and Elhanan Helpman ldquoThe Politics ofFree-Trade Agreementsrdquo American Economic Review 85 1995

Huntington Samuel P ldquoThe Lonely Superpowerrdquo Foreign Affairs78-2 1999

Kim Seokwoo ldquoThe Theoretical Foundations for ASEAN+3Prospects and Limitationsrdquo Journal of Asia-Pacific Affairs 5-2Asia-Pacific Research Center Hanyang University 2004

Kim Seokwoo The Political Economy of International Trade Hanul1998 (in Korean)

Kim Seokwoo ldquoThe Political Economy of FTA Formation betweenKorea and Japan From the Korean Perspectiverdquo The KoreanJournal of Area Studies 24-2 2006

Krueger Anne ldquoPolitical Economy of the Rent-Seeking SocietyrdquoAmerican Economic Review 64-3 1974

Lee Jin Won ldquoPolitical and Social Conditions for Korea-Japan


FTArdquo East-West Studies 14-2 2002 (in Korean)Magee Stephen P William A Brock and Leslie Young Black Hole

Tariffs and Endogenous Policy Theory Political Economy inGeneral Equilibrium New York Cambridge University Press1989

Mansfield Edward D and Helen V Milner ldquoThe New Wave ofRegionalismrdquo International Organization 53-3 1999

Mansfield Edward D ldquoAlliances Preferential Trading Arrange985088ments and International Traderdquo American Political ScienceReview 91-1 1997

Pascha Werner ldquoEconomic Integration in East Asia and Europe-AComparisionrdquo presented at the Conference organized by SeoulASEM Institute for International Relations Seoul Korea2003

Pfaff William ldquoThe Question of Hegemonyrdquo Foreign Affairs 80-12001

Putnam Robert ldquoDiplomacy and Domestic Politics The Logic ofTwo Level Gamesrdquo International Organization 43-3 1988

Remmer Karen L ldquoDoes Democracy Promote Interstate Coopera985088tion Lessons from the Mercosur Regionrdquo International StudiesQuarterly 42 1998

Schiff Maurice and L Alan Winters Regional Integration andDevelopment The World Bank 2003

Schott Jeffrey J ed Free Trade Agreements US Strategies andPriorities Institute for International Economics 2004

Sohn Chan-Hyun and Jinna Yoon ldquoKorearsquos FTA Policy CurrentStatus and Future Prospectsrdquo KIEP Discussion Paper 01-01KIEP 2001

Sohn Chan-Hyun and Jinna Yoon ldquoDoes the Gravity Model FitKorearsquos Trade Patternsrdquo KIEP Working Paper 01-01 2001

Viner Jacob The Customs Union Issue New York CarnegieEndowment for International Peace 1950


Ⅰ Introduction

It has become clearer that ldquopursuit of regionalism has becomenot a matter of choice but a matter of survivalrdquo1 As countrieshave competitively pursued regionalism they also began to worryabout being left behind the competition The core of this new re-gionalism is regional economic cooperation Regional economic ar-rangements are basically discriminatory in a sense that membercountries get preferential treatments Therefore being left out ofregionalism means economic losses unless a country has no in-ternational economic sector2

With the increase in economic regionalism each country facestwo important choices One is related to the direction and thestrategy of a countryrsquos overall foreign economic policy In select-ing a point between autarky and complete openness each countrywill adopt a certain strategy to get to a specific point in thatcontinuum A country may pursue multilateralism regionalismand or unilateralism in adopting its strategy The second is thatif a country joins competition for regionalism it has to decidewith whom it will pursue economic regionalism It also has to de-cide the number of partner countries for regionalism In selectingpartners for regionalism a country has to consider goals strat-egies types and depth of regionalism That is a country has toconsider both economic and political goals and both domestic andinternational goals A country has to consider its strategy to ach-ieve defined goals A country may choose between bilateral andminilateral regionalism A country also has to consider whether it

1 Minister for Trade MOFAT March 25 20052 Seokwoo Kim ldquoThe Political Economy of FTA Formation between Koreaand Japan From the Korean Perspectiverdquo The Korean Journal of AreaStudies 24-2 2006 p 278































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References


























































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References




















































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References














































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References









































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References




































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References































implemented)

AFTAKorea-Japan











Korea-United States








199219982000200120012001200220022002200220021999199919992000200020002000200020002000200120012001200320042005200520052007
























Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References


















































Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References











































Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References





































Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References































Korean Perspective







Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References
































Distance 598 716 2900 2311 6950 5214 6206 7494 6546 5024 11405

Population(Million)

481 1300 1278 43 624 2935 201 41 1038 319 68 160


GNIPC ($) 13980 1290 37180 24220 2540 41400 26900 20310 6770 28390 17380 4910


45432 17660 5359 2868 30129 2713 539 2711 2469 722 907


28255 35833 3899 2146 22779 7035 753 327 1097 409 1794

Exportsof

Industrial

Goods

ofExports

91 88 94 86 74 83 29 33 85 67 93 17

ofImports

64 80 58 83 78 80 86 83 86 86 83 81

Exportsof AgrGoods

ofExports

3 7 1 4 20 10 30 59 6 14 5 38

ofImports

10 8 19 4 8 7 6 9 6 6 7 8


79 151 29 0 147 41 59 43 162 51 - 70

of ExistingFTAs

2 0 3 6 2 9 8 2 10 5 9 10

DemocracyLevel

3 13 3 9 5 2 2 2 4 2 4 2














and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References



































and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References































and Canada























welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References














































welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References






































welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References
































welfareincrease()


GDP() export()

KoreaCanada

038029

150259162904

048040

053088

Source KIEP (2005)











Ⅵ Conclusions



















References





































Ⅵ Conclusions



















References






























Ⅵ Conclusions



















References











































References



































References





























References










































Documents

TheoriesandRealitiesofFTA FormationbetweenKoreaandCanada¹€석우.pdf · 2015-04-05 · hensive FTA in accordance with the 24th Article of GATT and the 5th Article of GATS. So far,