KIEP Newsletter Vol. 6 No. 3

KIEP Newsletter Vol. 6 No. 3 | February 2, 2018 | Print

KIEP Surmounting Global Challenges, Creative Response! Korea Institute for International Policy (ISSN: 2288-0348)


What Determined 2015 TPA Voting Pattern?: The Role of Trade Negotiating Objectives YOON Yeo Joon and LEE Woong / Working Paper 17-08

This paper analyzes 2015-TPA voting patterns in the Congress in the context of the trade negotiating objectives. By setting the trade negotiating objectives, the Congress lays out important trade agenda that the Administration is expected to address when it is negotiating trade deals with foreign countries. Therefore setting the objectives is subject of heated debates in the Congress and an important part of TPA. LPM and probit models are used to evaluate the importance of each trade negotiating objectives in 2015-TPA voting decisions. It turns out that the objective on promoting U.S. agricultural exports by reducing unfair trade barriers positively affected the voting decision in favor of the TPA. The objective on enforcing strong labor standards on trade partners also had significant impacts. One other notable result is that how much each congressional region export to China was also an important determinant. This variable is meant to capture several negotiating objectives as well as growing worries of large trade deficits with China. This study documents important issues that U.S. Congress is concerned about in making conducting and implementing trade policies. It may provide insights into the future course of U.S. trade policy and trade deals such as renegotiation of NAFTA and Korea-US FTA.

Reduction of Regulatory Restrictiveness in Services Sectors and Its Impact on FDI Inflows KIM Jong Duk, CHOI Boyoung, CHO Moonhee and CHUNG Min-chirl / World Economy Brief 18-02

The reduction of regulatory restrictiveness in services sectors in Korea using recent free trade agreements in effect and its impact on FDI inflows are investigated. The research outcomes provide three main findings as follows.
First, FDI inflows of Korea closely follow the trend of global FDI flows. FDI inflows to Korea from developed economies have appeared dominant; FDI inflows from the U.S., Japan and European economies account for the major share. The increase of FDI inflows from China is significant. Moreover, the FDI inflow shares of capital-intensive industries such as electronic, chemical, and machinery in manufacturing and financial, distribution, and business in services are also large. The fact that FDI inflows in services have become two times larger than those in manufacturing since early 2000's is noteworthy. In the meantime, while FDI flows in forms of M&A in most developed economies, M&As as a form of FDI are still less prevalent in Korea.
Second, Korea's services trade restrictiveness indices provided by the OECD are updated and recalculated reflecting the FTAs recently put in force. Further liberalization through recent FTAs in force is identified in legal, accounting and telecommunications services.
Third, the impact of services liberalization on FDI inflows in Korea is analyzed. As suggested in theoretical predictions, further services liberalization through FTAs plays a positive role in FDI inflows in Korea. Such outcomes are derived not only in services sectors but in manufacturing sectors as well.

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