The Effect of FTAs on Korean Trade Remedy System and Its Future Direction The Effect of FTAs on...
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The Effect of FTAs on Korean Trade Remedy System
and Its Future Direction
The Effect of FTAs on Korean Trade Remedy System
and Its Future Direction
2006.6.2
Dong-Sup ShimDirector of Investigation Policy
Division
2
Table of ContentsTable of Contents
Introduction• Recent proliferation of FTAs around the world
• FTA policies and implementations in Korea.
Main subject• Legal framework of FTAs under the WTO system• Trade remedy modifications in the FTAs• Examples of trade remedy features and their policies
Conclusion
• Trade remedy suggestions for improving the current FTA structure
• Role and future direction of the Korea Trade Commission in a FTA system.
3
ⅠIntroduction ⅠIntroduction
• Recent proliferation of FTAs around the
world
• FTA policies and implementations in
Korea
4
1. Global Proliferation of FTAs 1. Global Proliferation of FTAs
Sharp Increase in RTAs Worldwide• A total of 193 RTAs in effect as of March 2006• Only 50 RTAs under the GATT, 143 RTAs since the creation of the WTO
Annual Increase in RTAs
Numbe
r of
RTA
YEAR
5
2. Features of Recent FTAs 2. Features of Recent FTAs
First Only in Europe and Latin America but Now Global
• Japan, Singapore, India, and Australia have started to actively
pursue FTAs
• In particular, many East Asian countries are belatedly competing to sign FTAs Simultaneously Pursuing 'Expansion' and 'Integration’
• FTAs are recently being signed between cross regional nations
• Continent-wide FTAs covering a large bloc
6
2. Features of Recent FTAs (continued) 2. Features of Recent FTAs (continued)
Greater Liberalization than WTO Multilateral Agreements
• Coverage of FTAs are extending to include liberalization of service
and investment
• Trying to cover new sectors such as competition, labor and
environment ‘WTO Plus’ Trade Remedies
• To ensure transparency in operating trade remedies • To restrict the overuse of trade remedies and excessive trade
remedy actions
7
3. The Call for FTAs 3. The Call for FTAs
Improving the competency of Korean
industries through more openness
• FTAs are regarded as important reform measures
in the trade sector
Foreign Investment Appeal
• Example of Mexico since the conclusion of NAFTA
FTAs as a countermeasures for non-FTA members against disadvantages
• Exclusion from the worldwide FTA network
• Disadvantages caused by trade diversion effects
8
4. Korea's FTA Policies 4. Korea's FTA Policies
FTAs: Central to Korea's Economic Policies
Strategies for Pursuing FTAs
• Pursuing Multiple FTAs Simulatenously
• Pursuing Comprehensive FTA Coverages
• Pursuing FTAs with Large Economic Blocs
9
5. Korea's current status in pursuing FTAs 5. Korea's current status in pursuing FTAs
Actively implementing FTA policies since 2003
• FTAs concluded with
: Chile, Singapore, EFTA and ASEAN
• Current ongoing FTAs negotiations
: U.S, Japan, Canada, India, Mexico
• FTAs under consideration with
: China, Mercosur
10
ⅠMain subjectⅠMain subject
• Legal framework of FTAs under the WTO
system
• Trade remedy modifications in the FTAs
• Examples of trade remedy features and their
policies
11
1. Legal Framework of FTA under the WTO system 1. Legal Framework of FTA under the WTO system
FTAs : WTO Recognized Regional Agreements
• Article 24 of the 1994 GATT states forms of regionalism
* customs union, FTA and preliminary agreement to establish a regional agreement
WTO Exemptions for FTAs
• "all commercial barriers between member states should be abolished"
• "all commercial barriers between member & non-member states
should not be higher”
⇒ If such conditions are met, the FTA exempt from rules of GATT and the WTO
12
2. Trade Remedy Features in FTAs 2. Trade Remedy Features in FTAs
Specific Trade Remedies per Specific FTAs
Tailored FTA Trade Remedies
Existing Trade Remedies
• Not applying trade remedies to both sides
• Strengthening or easing trade remedies compared to the WTO rules
• Applying trade remedies stated in the WTO rules
13
3. Examples of trade remedy features and their policies 3. Examples of trade remedy features and their policies
Analysis of Foreign FTA Trade Remedies
• New Zealand
- Singapore
• NAFTA• USA-Singapore• EFTA-Singapore• Japan-Singapore• Chile-Mexico• EC-Mexico
Strengtened compared to WTO
• New Zealand - Singapore• EFTA-Singapore• Japan-Singapore• EC-Mexico
• EC-Mexico• Japan-Singapore
• EC-Mexico• Japan-Singapore• EFTA-Singapore
Applying WTO
• NAFTA• USA-Singapore• Chile-Mexico
• NAFTA• USA-Singapore• Chile-Mexico
• NAFTA• USA-Singapore• Chile-Mexico
• EC-Mexico
Eased compared to WTO
CVD
• EFTA - SingaporeAD
• New Zealand
- Singapore Global
SG
• New Zealand - Singapore
Bilatera
l SG
Exemption of WTO
←← Excercise of Actions(Difficult) Excercise of Actions(Easy) →→←← Level of Actions(Low) Level of Actions(High) →→
Section
SG
14
3. Examples of trade remedy features and their policies (continued)
3. Examples of trade remedy features and their policies (continued)
Analysis of Korean Trade Remedy System
• Korea-Singapore• Korea-EFTA
• Korea-Singapore• Korea-EFTA• Korea-ASEAN
Strengtened compared to WTO
• Korea-Chile• Korea-Singapore• Korea-EFTA• Korea-ASEAN
• Korea-Chile• Korea-ASEAN
• Korea-Chile• Korea-Singapore• Korea-EFTA• Korea-ASEAN
Applying WTO
• Korea-Chile
Eased compared to WTO
CVD
AD
Global SG
Bilatera
l SG
Exemption of WTO
←← Excercise of Actions(Difficult) Excercise of Actions(Easy) →→←← Level of Actions(Low) Level of Actions(High) →→
Section
SG
15
3. Examples of trade remedy features and their policies (continued)
3. Examples of trade remedy features and their policies (continued)
Characteristics of Korea's trade remedy system in FTAs
• Most of bilateral SGs are stricter than that of WTO Agreements
• Global SG : None of exemption of mutual application
• AD : Adheres to WTO or puts more reinforced
• CVD : Only Adhere to WTO
16
ⅠConclusionⅠConclusion
• Trade remedy suggestions for improving the current FTA structure
• Role of the Korea Trade Commission in a FTA system
17
1. Trade remedy suggestions for improving the current FTA structure 1. Trade remedy suggestions for improving the current FTA structure
Factors in Determining Trade Remedy Systems • Competitive advantage over general industries and major trade items
Bridging Differing Trade Remedy Policies
• Comparative disadvantage in terms of general industries and major items
⇒ Promote utilization of trade remedy system
and introduce a system same as that of the WTO or a less strict version
• Comparative advantage in terms of general industries and major items
⇒ Restrict utilization of trade remedy system
• Similar level of competitiveness but many industries to compete with
⇒ Maintain a neutral trade remedy system
• Similar level of competitiveness but few industries to compete with
⇒ Restrict utilization of trade remedy system
18
2. Role and Future Direction of the KTC 2. Role and Future Direction of the KTC
About KTC
• Representative government agency taking trade remedies against
injury to the domestic industry and unfair trade actions• Chief responsible body in creating a new trade remedy system in the Era of FTAs
Future Direction of the KTC
• Role of the KTC becoming increasingly important
• Maximizing potential through expanding its organization and
hiring more experts
• Building a comprehensive trade remedy databases in linkage with
the current portal web-site for trade remedy
• Closer ties with international global trade remedy agencies
감 사 합 니 다
Thank You!Thank You!