Korea-U.S. FTA

The FTA and the Market for Lawyers in Korea

The market for lawyers in Korea appears to have tightened up, as Korean law firms anticipate increased competition under the trade agreement: Law Firms Strive For Survival, Lawyers Welcome Open Legal Market (Dong-a, January 8, 2008):

Korea's Potential GDP Boost from Trade Liberalization

Trade opening - driven by better communications, lower transportation costs, and reduced trade barriers - has Increased average Korean incomes by about $2,000 a person, and further liberalization could add another $1,200 to $1,600. 

That's what Gary Hufbauer and Agustin Cornejo of the Peterson Institute find in an examination of existing studies and from some imaginative "back-of-the-envelope" calculations. 

Here's the draft of a paper they gave at last Spring's Korea Economic Institute workshop on "Static and Dynamic Consequences of a KORUS FTA.": The Payoff to South Korea From Globalization.

Amongst other things, Hufbauer and Cornejo summarize a large number of general equilibrium analyses of the impact of additional trade reforms on the Korean economy.  This box plot gives an overview:

Symposium on U.S.-Korea Relations

If you were like me, and missed the live Webcast of the symposium "Towards Sustainable Economic and Security Relations in East Asia: U.S. and ROK Policy Options" last week, drop a line to USC's Korean Studies Institute which co-sponsored it - they'll send you a free DVD of the Webcast (send an email to Julia Cunico at "jbc_at_keia.org").

The day and a half symposium, which was also co-sponsored by the Korean Economic Institute, had at least a couple sessions that bear on the FTA.  Here is the program.

On Thursday the first panel discussion - U.S.-Korea economic relations - included a presentation by Robert Stern and Kozo Kiyota of the University of Michigan.  Stern and Kiyota used the distinctive Michigan Computable General Equilibrium Model to evaluate an FTA between the U.S. and Korea (Economic Effects of a Korea - U.S. Free Trade Agreement).  The panel also included a presentation by Jongryn Mo, Professor of Political Economy at Yonsei University in Seoul.  Jeffrey Nugent of the USC Economics Department served as discussant.

The first session on Friday, "East Asia's Economic and Security Regionalism: Old Constraints and New Prospects" may also be useful.  The three presenters here were Gilbert Rozman, a sociologist from Princeton, whose whose work explores "national identities, especially in Japan and South Korea, to understand how they shape bilateral trust and evolving relations in the region," and co-presenters and co-authors, political scientists Min Gyo Koo of USC and Vinod K. Aggarwal of Berkely.  They've been working together on Northeast Asia regional issues for several years.  Most recently, they're joint editors of a new book, Asia's New Institutional Architecture: Evolving Structures for Managing Trade, Financial, and Security Relations , which will be published this November by Springer.

Other panels appear to be less directly connected to the FTA: (1) U.S. - ROK Security Relations, (2) Can a Deal Be Done?  The DPRK Nuclear Question, (3) Korean Soft Power: Transnational Cultural Flows, Korean Film, and Diplomacy in East Asia.  Because the U.S. has important political/diplomatic objectives for the agreement, these sessions may still be relevant.

U.S. Textile Manufacturers Critique the ITC Report

The National Council of Textile Organizations thinks the recent International Trade Commission (ITC)report has a flawed analysis of the textile provisions of the KORUS FTA: Textile Manufacturers Hit South Korean FTA Report (Oct 2).  They think it understates the adverse impact on the textile industry:

"Static and Dynamic Consequences of a KORUS FTA"

The Korea Economic Institute has released a set of papers on the Korea-U.S. FTA under the title, Static and Dynamic Consequences of a KORUS FTA. 

These papers are the product of a conference on May 1, sponsored by the Korea Economic Institute, the Peter G. Peterson Institute for International Economics, and the Korea-America Economic Association.

A wide range of papers (10 in all, including a comment the conference summary); some on the Kiyota-Stern analysis of the FTA, one with a new general equilibrium analysis using Purdue's GTAP model, others addressing the dynamic impacts of the FTA as capital stocks respond to changing profit opportunities, and still others looking at regional issues.

ITC Estimates of Aggregate KORUS FTA Impacts on the U.S.

The GDP and employment impacts of agriculture and manufactures liberalization under the Korea-U.S. FTA will be "negligible," says the U.S. International Trade Commission (ITC).  The ITC estimates don't include the impacts of services liberalization, and of other elements in the agreement.

US International Trade Commission Review of KORUS FTA Released

The U.S. International Trade Commission (ITC) released its statutorily required study of the Korea-U.S. FTA today.  You can access the report through the ITC's news release post: U.S.-Korea Free Trade Agreement: Potential Economy-wide and Selected Sectoral Effects .  This is long - the pdf reader says 392 pages, and it'll take a while to wade through.

The press release is short - here is the full text:

The KORUS FTA and Korean Public Finance

The Koreans expect to see tariff revenues drop by about 860 billion won (or about $926 million) each year in the short to medium term, once the FTA with the U.S. becomes effective.  But once the growth induced by the agreement takes hold, other tax revenues should increase by enough to offset the tariff impact: Tax revenues related to Korea-US FTA to decrease 860 bil. won annually (Korea.net, Sept 16, 2007):

State-by-state benefits of the Korea-U.S. FTA

Export.Gov, a Commerce Department International Trade Administration's Web site providing information for U.S. exporters, has a set of pages describing the state-by-state "benefits" of the FTA: U.S.- Korea Free Agreement State Export Data . 

Kiyota and Stern on the impacts of the Korea-U.S. FTA

Researchers at the University of Michigan think the economic impacts of the KFTA will be rather small. Kozo Kiyota and Robert Stern (Economic Effects of a Korea-U.S. Free Trade Agreement) find that, in the medium term, after all the changes have worked themselves out, the U.S. will be better off by a small fraction, somewhat more than a tenth, of a percent of GDP.That's about $25 billion a year.