While Korea`s avalanche of free trade agreements appears to be aggressive liberalization, Korea has been the subject of complaints about strengthening the review of preferential treatment applications in the form of documentation requests and on-site visits to supply chain suppliers. While Korea`s requirements are also within the limits of KORUS, U.S. companies have complained that Korean zeal in implementing the agreement boils down to “excessive” documentation requirements. Other measures proposed by U.S. exporters are environmental standards, consumer protection rules and equivalence of standards. Therefore, it is one thing to negotiate an agreement, it is another to ensure that the original texts have a measurable impact on trade. Korea and Canada have been aggressive in preferential trade agreements. Korea has been the icebreaker in reducing interregional agreements with major economies. Koreu had to drop the Dominos, since korus, KAFTA and CKFTA were completed shortly thereafter. Korea is also participating in the Comprehensive Regional Economic Partnership (RCEP) negotiations with ASEAN, China, India, Japan, Australia and New Zealand. Negotiations between China and Japan and Korea (CJK) are an important part of the RCEP. In May 2012, CJK participants signed the trilateral investment agreement between Japan and China and Korea, an important step in completing a free trade agreement with the CJK and the major RCEP agreement. Korea is also an active member of the Trans-Pacific Partnership (TPP).
For the rest of the process, the agreement must be ratified before it enters into force. For this impact assessment, we expect it to come into effect on January 1, 2015. In substance, the agreement follows a standard model for the subject matter and does not take new paths in regulatory areas. While it is difficult to draw precise conclusions about how the negotiated text translates into trade, the CKFTA seems to achieve the same degree of liberalization as KORUS or KAFTA in the ordinary component of the treaty. The model yields impact results on the aggregates of national accounts, industry production and prices, inputs from capital and labour production (volumes and prices) as well as FDI and FDI flows.Leave a reply