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:
Continue reading "Korea's Potential GDP Boost from Trade Liberalization" »
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.
