Fifteen Years of Korea's FTA: Achievements and Policy Implications

Moonhee Cho (), Young Gui Kim (), Chankwon Bae (), Hyeyoon Keum () and Jun-Hyun Eom ()
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Moonhee Cho: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/
Young Gui Kim: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/
Chankwon Bae: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/
Hyeyoon Keum: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/
Jun-Hyun Eom: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/

No 20-38, World Economy Brief from Korea Institute for International Economic Policy

Abstract: Since signing the first free trade agreement (FTA) with Chile in 2004, Korea has established 16 FTAs with 57 countries including EFTA, ASEAN, EU, US, etc. In this study we examine whether Korea's FTAs have achieved their original objectives in the following three aspects: FTA network, product market openness and foreign direct investment (FDI). We find that Korea showed a high level of centrality during 2010-2016, but recently it has weakened slightly. The empirical analysis shows that FTAs have a positive effect on the increase in both exports and imports. We also find that FTAs have a positive effect on FDI. In addition, FTAs increased outbound foreign direct investment (OFDI) to both developed and developing countries, but increased inbound foreign direct investment (IFDI) only from developed countries.

Keywords: Korea; FTA; policy; network; product market; openness; foreign direct investment (search for similar items in EconPapers)
Pages: 5 pages
Date: 2020-12-22
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwe:2020_038

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