Recently, along with the globalization of economic activities and expanded competition, cases where companies are outsourcing nonessential part of their work in order to maximize comparative advantage are increasing. Outsourcing directly related to manufacturing production used to be limited to design and engineering, but it now has expanded into the field of business-related services, such as management consulting and advertising. Under such circumstances, the importance of the business service industry is growing in both quantitative and qualitative aspects. In many of the developed nations including the United States, the business service industry takes up 12~14% of the entire economy. In the case of Korea, the proportion is still low,but it has been showing signs of rapid growth.(The rest is omitted)

Ⅰ. Introduction Ⅱ. Introduction of the Regional Integration Index Ⅲ. Application of the Regional Integration Index Ⅳ. Comparison and Interpretation Ⅴ. Conclusions References

The purpose of this research is to develop a regional integration index and apply the index to East Asia, as well as other major regional communities, such as ASEAN, EU, MERCOSUR, and NAFTA. The regional integration index was constructed to measure the degree of integration in terms of four criteria: functional integration, political/security integration, social and cultural integration, and institutional integration. In the case of East Asia, the region scored low in 1994 at the inception of regional integration, in terms of indices for political/security and institutional integration, mainly due to the lack of political leadership. However, the functional integration index was higher than in other regions at the initial stage, despite the absence of an economic union. During the development stage of integration of East Asia in 2000, the regional integration index increased. In 2007, the overall score increased as well, but the functional integration index actually decreased due to the reduction of intra-regional FDI. Noticeable increase in the socio-cultural index was observed in the region as East Asia was swept by the spreading popularity of Korean pop culture known as Hallyu, or the Korean wave. Currently, the integrative factors in the socio-cultural arena in East Asia is lower than those of EU and NAFTA, but almost the same as those of ASEAN and MERCOSUR. The political and security factor is much lower than those of EU and MERCOSUR, and even lower than those of ASEAN and NAFTA. Following policy recommendation from Kim and Park(2004), the following implications for the East Asian integration can be suggested. First, East Asian countries need to make efforts to attain qualifications as an area with greater economic integration. To this end, economic cooperation needs to increase in terms of trade, and institution-building for exchange rate stability must commence. Second, it would be vital to make an advanced blueprint for regional cooperation and integration in East Asia. Third, East Asian countries need greater exposure to opportunities for binding negotiations on regional issues, and accumulate sufficient experience in resolving the issues. Fourth, a variety of policies are required so that potential 'losers' in regional integration would be encouraged to continue their engagement in the process. Finally, it is strongly recommended that a kind of core group be formed so as not to lose the driving force for integration. Case in point, Germany and France have kept a key bilateral relation as a linchpin over the course of the entire European integration process. In East Asia, Japan and China are expected to play such a role, but if the two countries are not suited for the role or up to the challenge, Korea is strongly recommended to initiate the necessary multilateral relation.

I. Introduction Ⅱ. Theoretical Framework Ⅲ. Data Ⅳ. Econometric Specifications Ⅴ. Empirical Results Ⅵ. Conclusion References Appendix

This paper analyzes the trade-off relationship between exports and horizontal FDI in response to a mutual recognition agreement (MRA) for technical regulations and certification procedures for import goods. As an MRA is concluded to reduce entry costs of exporting, multinationals (MNEs) derive more benefits from economies of scale than from tariff-jumping strategies, implying that they have more incentive to export than to perform horizontal FDI. In order to prove the above argument, the paper develops a monopolistic competition model with international trade, heterogeneous firms and MRA, based on the work of Helpman, Melitz and Yeaple (2004); and then tests empirically the theoretical results, utilizing data from U.S. multinational affiliate sales and exports. The empirical results show that MRAs have positive effects on the U.S. exports relative to horizontal FDI, bringing the results in line with the theoretical model.

Korean Economy has been affected by various international economic shocks, since it is export-dependent small open economy. It has been directly influenced by import countries' business cycle because of its high dependence on export, while it has been also vulnerable to the changes of raw material prices. Moreover, recently as the share of foreign investors increases, the financial sector is exposed to financial risks from the foreign countries. This study aims at explaining the effects of the international economic shocks on Korean economy, and analyzing the effectiveness of macroeconomic policies as countermeasures. This study is different from previous studies in this area in that it reflects recent international economic environment which has been dramatically changed since 2000s, and uses 5-country open economy macroeconomic model.(The rest is omitted)

Foreign direct investment (FDI) has been established as one of the main pillars of growth in the Korean economy since the 1997 financial crisis. However, the growth of FDI has slowed to a virtual halt recently. In particular, global increases in FDI from 2003 to 2007 did not translate into growth in Korea, as FDI into Korea actually decreased during the same period. Even though FDI inflow met the target level in 2009, FDI growth into Korea has become stagnant, standing still between 10 to 12 billion US dollars since 2000.(The rest is omitted.)

Executive Summary

I. The Way to Membership

II. Why Membership?

III. Specific Features of the “Eastern” Enlargement

IV. Economic Impacts of Accession and Tasks of Successful Membership

V. Is There a Common Position of the CEECs in Key Integration Questions?

VI. Concluding Remarks

References

The last and historic enlargement of the European Union by ten new countries has fundamentally changed the nature of the decades-long process of integration in Europe. , However, it is not only the enlargement but also the global challenges and the unprecedented reform pressure accumulated both in some key member countries and on the level of Community policies that urge to reconsider the mission, priorities and basic instruments of European integration for the coming years and decades.
The paper deals with the process of enlargement, focusing on the negotiations and their consequences. It gathers arguments in favour of joining the European Union on the side of the new members. Moreover, it addresses traditional and new community policies that have to cope with the new challenges, starting from the decision-making process and the reforming of the common agricultural policy, through budgetary considerations to desirable new activities of the enlarged Union in economic, social and political areas. The author strongly argues for a quick and fundamental process of deepening the integration, as a major requirement of strengthening or just creating the global position of Europe in the next decades.
The analysis of the short-term impacts of enlargement, mainly on the economic development of the new members indicates that most of the fears did not appear, while expectations have mostly still to be fulfilled in the next years. This, however, needs a clear integration strategy in the accession countries and a not less clear pro-integration strategy on the level of the EU. This should include a changing mentality from status-quo towards future-oriented thinking and a shift from narrow-minded national positions towards the awareness and implementation of European priorities.
Although, and at first glance, the new members reveal similar features and are confronted with similar challenges in order to become successful members of the European integration, a more detailed survey indicates substantial differences not only in their economic structure and political interests but also in their level of preparation and, even more importantly, in their capacity to absorb the positive and negative shocks connected with membership. Based on these considerations, it is hardly conceivable that the Central and Eastern European countries would form a cohesive and strong lobby within the enlarged Union. Excepting the efforts to redistribute and perhaps restructure the EU budget, their interests are likely to lead to the formation of different strategic and tactical alliances within the enlarged Community.
This paper is organized in the following order: first it reviews the most important stages of relations between the CEECs and the European integration (Chapter I), followed by the key arguments for membership (Chapter II). Chapter III deals with the most significant features of enlargement. Shorter and longer-term impacts of enlargement and tasks of successful membership are analyzed in Chapter IV. Chapter V tries to identify areas in which the CEECs may develop a common position within the enlarged EU. Chapter VI sums up the arguments and presents some concluding remarks.

I. An Overview of the EU ODA

II. The EU Classical ODA Subjects – the ACP Countries

III. Northern Africa – the Mediterranean Policy

IV. Relations with Asia and Latin America (ALA countries)

V. EU ODA – A Perfect..ible Model

VI. EU ODA and the Soft Power Concept

VII. The Universal Relevance of the EU Experience

VIII. Towards a Strengthened EU – Asia Cooperation on Development

IX. Conclusion

References

The article starts with an overview of the EU ODA, the author succinctly presenting the EU policy towards the ACP countries, Northern Africa, Asia and Latin America. This introductory section is followed by an analysis on the EU ODA policy as such which is considered to be still perfectible terms of consistency and coordination.
The article continues with an analysis of the EU ODA from the 'soft power' theory perspective. The author emphasizes that development assistance is linked to the notion of 'power' to the extent that it generates prestige, influence and persuasion in among international actors. This leads to the idea of ODA as a foreign policy instrument. As for the way the EU is using its ODA for achieving its foreign policy agenda, the author underlines the use of the economic and political 'the conditionality' as 'the hard edge of soft power.' On the same logic the author presents the more recent EU strategy of linking development to security, thus 'smartening' its 'soft power.'
In the second part of the article, the author reviews the possible relevance of EU ODA policy experience for Asia. The author stresses that despite major differences, the EU can provide enough 'prêt a porte' elements for other regions. Thus, based on the EU experience, a political will of individual regional actors, a basic institutional framework, an integrated ODA vision and a financial instrument to support it, are the ingredients to start a common regional ODA policy. At the very least, even the simple initiation of a form of cooperation and coordination of national ODA policies between the major regional donors in Asia will be a welcome step forward. In this context, the 'European Consensus on Development' strategy could inspire a similar 'Asian Consensus on Development.' The author also advocates the idea of an independent 'Asian Agency for Development.'
The article concludes with a pledge for a strengthened EU-Asia cooperation on development based on '3C formula': cooperation, coordination, concreteness.

Since the conclusion of its first FTA with Chile in 2003, Korea concluded FTAs with Singapore, the EFTA and ASEAN. FTAs with the U.S., India, and EU were signed in April 2007, August and October 2009, respectively; and are currently awaiting approval for ratification. The Korean government is currently negotiating FTAs with Canada, Mexico, the GCC, Australia, New Zealand and Peru. Korea's robust FTA policy is mainly due to expectations of benefits from bilateral/regional economic integration; including efficient resource allocation, economy of scale, and enhanced productivity, among others. Trade statistics during recent years reveal that trade with FTA members such as Chile, Singapore, and the ASEAN has increased dramatically. In addition, the Korean experience shows that the FTAs provided Korea with opportunities to upgrade economic infrastructure and adapt itself to global standards. This study aims to study the mid- and long-term policy directions to take maximum advantage of current FTAs. It focuses on national policies to tackle the challenge of FTAs rather than external negotiation strategies. Specifically, this study examines the effects of FTAs such as the EU, the NAFTA, and the CER on production, employment, and industrial structure in the OECD. This study implements the following two-stage approach. First, it will apply an unbalanced nested error components model to the pooled data for the full 30 country, 16 industry, and 24 year sample. Second, it implements both one-way and two-way error component regression models to take care of fixed effects and random effects along with country-specific and time-specific characteristics. This study demonstrates that the coefficient on FTAs is statistically significant and positive, when we apply the nested error components model to the pooled data on the full 16 industries in the OECD, meaning that FTAs tend to enhance the production and employment structures. When we analyze country-specific and time-specific effects using the fixed effects model as well as the random effects model for the six industries, the coefficient on FTAs turned out to have different signs depending on the industry. The FTAs tend to increase the production share of the metal industry but decrease textile and business services industries, which are statistically significant. The effects of FTAs on production shares in agriculture, food, and transport industries turned out to be statistically insignificant. On the other hand, the FTAs tend to decrease employment shares of agriculture, food, and business services industries, but increase those of metals and transport industries. This study also conducts case studies in the agricultural industry, the manufacturing industry and the services industry, which shows how countries have implemented structural adjustment policies in order to cope with the economic shocks that an FTA brought about. For the case of the agricultural industry, this study selected the avocado and corn industries of Mexico, the dairy industry of Australia, and the fishery industry of Denmark. In addition, reviewed among the manufacturing industry were the textile and apparel industry of the U.S., the automobile industry of Poland, the steel industry of the EU, and the shipbuilding industry of Australia. The services industries examined here include the health services industries of Thailand and Japan, and the finance industry of Mexico. As a result of FTA or market opening in general, one expects that trade and investment would increase, resources will be distributed effectively, and scale economies realized. However, these fruits of FTAs require considerable effort. Results of the case studies brings forward the important policy implication that countries should invest more effort into domestic industrial adjustment and institutional improvement, since FTA policy itself does not automatically give rise to economic benefits for the signatory state. This study analyzes the effects of FTAs through quantitative as well as qualitative approaches, thereby providing the policy implications from experiences of the OECD countries. When we reviewed Korea's national policies for handling the challenge of FTAs, it turned out that they were not fully effective in spite of notable achievements. In this respect, Korea's trade and structural adjustment policies should be implemented in the following direction. First, Korea will have to strengthen competitiveness in the newly growing and high-value-added industries where most benefits of FTAs are expected. The structural adjustment policies should be time-bound with a clear exit strategy, and their transparency should be enhanced to make sure that government budgets are executed effectively and negative consequences from FTAs addressed properly. Second, trade and foreign direct investment (FDI) policies should be upgraded to the level of advanced countries, especially in terms of service liberalization and legal institutions related to FDIs. In addition, the utilization rate of FTA preferential tariffs should be enhanced in order to maximize profits without any additional costs. Korea should take follow-up measures to address obstacles to the utilization of FTAs by businesses. Third, Korea can address the consequences from FTAs only when such effort is accompanied by trade adjustment policies. Especially, a simple scheme of injury compensation is not enough. The trade adjustment assistance program, a useful policy tool to minimize injuries of market opening, should be effectively developed and managed; inclusion of regional support scheme can be a part of the future progress. Fourth, the Korean government must also improve economic infrastructures as well as legal bases for economic activities; such as factor market regulations, competition law, etc.

International commodity prices, including oil prices that experienced a dramatic fall during global recession, are on the rise again. Oil prices have reached their highest for this year while copper and nickel have also rallied strongly compared to the beginning of this year. The rise of commodity prices comes amid speculation that excessive liquidity and increasing demand from China and other countries are driving the commodity market. Although it is difficult to predict the price changes in the commodity market given the complex nature of the factors causing price fluctuations; the dominant view of most analysts, from their comprehensive price forecasts, seems to be that the market is headed upward. Expectations of early recovery from global recession have already prevailed, and it is regarded as a fact that higher oil price will consequently follow.
As a country poor in natural resources, South Korea has repeatedly faced difficulties when commodity prices became unstable. Sole reliance on importing for acquisition of strategic resources provides Korea with no guarantees whatsoever for securing those resources. Therefore, it would be more practical for us to heighten our own level of development via direct investment measures.
This research intends to provide solutions for stable resource acquisition and thus our strategic approaches toward this end have been elicited by studying 4 regions: Russia, Central Asia, Latin America and Africa. There have already been many studies concerning overseas resource development since it has emerged as a major and current issue. But, as previously mentioned, this paper takes on a local perspective, to find strategies tailored to each region, something that was not emphasized in past studies. The region-specific strategy here can also be regarded as 'customized' plans that take account of our capabilities and needs of partner countries for cooperation. I hope this paper can provide useful guidance to those in government, corporate sectors and others who have interest in the field. The local customization strategy drawn from this paper can be summarized as below.
The following 4 methods of the local customization are suggested for Russian region. First, implement cross investment strategy for utilizing both upper/down streams. This can be carried out in the context of Korean companies purchasing a Russian energy company (or parent company) while the Korean government can allow Russia to acquire stocks from domestic gas energy firms. Also, for the sake of strengthening cooperative ties involving South Korea-North Korea-Russia, South Korea can participate together with Russia in North Korea's energy infrastructure industry, thereby establishing shared rights either for construction and management in the LNG areas of the Far East or for gas fields in the East Siberia. The second is active participation in the energy industry through M&A. There has been a boom recently for domestic and overseas M&A activities as the country is implementing restructuring plans for its energy industry. It is also recommended that Koreans invest in Russian energy companies through equity purchase or strategic alliance because stocks of many Russian energy firms are underpriced due to falling international commodities prices. Third, it is important to examine the political power dynamics in Russia and direction for possible impact on restructuring policies for their energy industry. The key players in Korean-Russian collaboration are the federal government, state-owned companies, and local government and so forth. Therefore, the first step would be to accurately understand what goes on in the energy industry and its power structure by carefully observing policies laid out by the central government and state-owned firms following, and the local governments that have jurisdiction over legal, institutional permits in the development regions; then seeking ways to take cooperation among those parties to a higher level. Furthermore, detailed analysis on the prospect of the Russian energy industry is necessary. The fourth method is to involve another country's participation in line with our cooperative activities with Russia. As Russia is expanding its resource development efforts in the CIS region as well as in Africa, there is a need to find ways to make joint investments concerning the development plan. For example, a consortium can be set up with Gazprom for developing coal mines in the Central Asia or Korea can secure a shared role in Algeria's LNG technology development project.
With respect to resource development in Central Asia, we have suggested the following four region-tailored strategy plans. First is resource development strategy in accordance with the country's power structure and its petrochemical industry. As Central Asian countries like Kazakhstan have given much focus to industry diversification by fostering non-petroleum industries, we need to ponder upon potential for cooperation in the region to constantly pursue co-investment strategy, together with plans for resource development and entry into energy industries in the region. The range of opportunities include power plant construction, oil field investment, nuclear power plant and uranium coal mine construction, coal processing plants, and petrochemical plants as well as simultaneous entry into resource development projects. Second, building cooperative resource infrastructure by way of financial collaboration can be actively contemplated. Central Asian countries in the midst of global recession are keenly aware of South Korean capacities in recovering from the foreign exchange crisis and they are actively asking South Korea's advice on improving their own financial systems. From the Korean perspective, there are no major technical difficulties to be negotiated, and this can be an effective way of doing business with regard to transferring our experience and contributing to the development of Central Asian financial industries. In the long run, we can assume that the growing needs for financial cooperation among Central Asian nations can help us lead such financial collaboration and convert it naturally into energy-related collaboration. Third suggestion is a go-around-entry strategy via Turkey. Based on the country's historical relation with other countries in Central Asia, Turkey has been expanding their political/economic influence over the region, and we can form a strategic alliance with Turkish firms to facilitate our entry. Lastly, Koreans can contemplate diplomatic policies with Central Asian countries concerning natural resources. Unlike Latin American nations or African states, the political structure of Central Asian nations is not given to frequent regime change, meaning cooperative relations with them could be sustained for an extensive time period. There is a need to heighten the status of diplomatic meetings, from deputy secretary-level to prime minister-level, which was the case during the 'Korea-Central Asia Cooperative Forum'. Furthermore, there is a need to improve the degree of exchange/communication with the new leaders in the states, where political prospects of ruling parties have not yet to be confirmed.
In case of Latin America, we have suggested a plan comprising of five region-tailored strategies. First is an entry strategy through specialization in specific role in public and private sectors depending on the investment environment in Latin America. The region contains some countries engaged in 'resource nationalism' in which political/economic risks can be very high. In this respect, for entry into less risky countries, private companies should take a role in establishing specialization structures while public companies (or government) that have a comparatively higher capabilities for dealing with the political/economic risk should take the lead in the high- risk countries. Second is by forming a strategic alliance for cooperation with the Ibero-American region. The need to build a strategically cooperative relation with National Oil Company (NOC) that attained an exclusive position among resource-rich countries in the region precedes any other process. Also, we need to actively devise a way to establish tri-party cooperative systems (South Korea-Iberoamerica-Latin America) by teaming up with firms such as RespolYPF, Galp and other Ibero-American firms beforehand, as they have linguistic/cultural/historical ties with Latin America along with much experience in entering into domestic market. By doing so, Korea can aggressively pursue the regional resource development market and then can think of entering other actively-invested areas like Africa or other alternative regions. Third is through international organizations (IO) in Latin America. Korea should first consider going into Latin American resource development market via the Inter-American Development Bank (IDB), in which South Korea has been a member since 2005. More specific measures include △Using credit for financing resource development projects, △promoting coal mining technology collaboration through the IDB trust fund, △partnership with IBD in corporate social responsibility activities. Furthermore, it is necessary to join OLADE, the only organization for energy cooperation in Latin America, which can provide a channel in which to create opportunities for entry and conditions for investment. The fourth can be executed as a combination of industry coordination promotion strategies. Brazil has emerged as one of the world's top 10 petroleum-exporting counties and it has nurtured top-notch technology in ocean-oil field extraction. On the other hand, South Korea is arguably the world's best in both ship-building and marine engineering industries, which can serve Brazil's needs. A win-win cooperative model should be established between the two countries through high-tech coordination between the oil and shipbuilding industries. A fifth suggestion involves developing a resource-development FTA model. When promoting FTA among MERCOSUR, Peru, Columbia and other resource-rich countries in Latin America, a new FTA cooperative model must be developed. We especially need to benchmark the case of China, who included clearly-outlined details for resource development in the FTA agreements.
For Africa, we have also present a plan consisting of five suggestions. First of all, since Africa is divided into 53 nations with different investment potentials and conditions, we need to consider each country's unique characteristics in formulating entry strategy. This research provides suggestions for entry based on African resource-development market characteristics, divided into 3 categories. A second suggestion involves promotion of joint-entry (resource-industry linked). Joint-entry strategy can be deemed a conceptually wise model in terms of increasing resource development investment opportunities by combining together Korea's competitive industries and SOC, and also ease the complicated overseas expansion process for related industries. However, the validity of such a model is questionable since it poses some problems upon close examination. Effective operation of a joint-entry strategies depend on the level of detailed preparation and internal mediation among participant firms, and also on the government's active role as a coordinator. However, limitations found in joint-entry strategies are mostly of a pragmatic nature involved in its implementation, rather than conceptual ones concerning entry strategy itself. Our third suggestion is that there is a need to strengthen diplomatic ties with resource-rich countries. If we take into account of the fact that most African countries are ruled by authoritarian regimes, a more effective method of acquiring resources would rely on diplomatic bargaining power of the Korean government. This research has designated 󰡔4 plus 3󰡕 nations as a target for top-priority resource diplomacy. The fourth suggestion is an infrastructure-building scheme through resource coordination for development collaboration, such as new village construction. Since general entry methods merely aimed at acquiring resources is both short-lived and is subject to unexpected errors that may result, we need to include official development assistance (ODA) in the resource cooperative efforts between South Korea and Africa. The growth of development collaboration can lead to economic cooperation and partnership and will eventually benefit Korea by stabilizing the acquisition process for energy resources. Fifth, we also need to establish a base for entry by providing assistance for development studies. Also, to overcome entrance difficulties due to variable costs and risks, entering companies will require government subsidies. One of the examples is development studies business. In regard to development studies, government can provide meaningful financial support to private firms launching businesses in the newly developing nations, to supplement the firms' initial costs and risks. In addition, our companies are faced with several problems when trying to launch businesses in the African resource development market, and so, assistance for development studies could perform a kind of leverage to facilitate their business activities. Trust funds from African Development Bank (AfDB) are mainly used for examining business potential (F/S) of its big-scale development plan and technology collaboration projects, and thus, it is urgent that we find ways to utilize trust funds from AfDB to discover new businesses and to link EDCF business plans with the implementation of such activities.
The research above has presented several strategies tailored to each region - from the perspective of a regional studies expert, but there may be other plans that are region-specific and thus customized. And suggestions from this paper are inevitably subject to necessary modifications with respect to changes in environments of the related countries. For instance, joint-entry plan mentioned here has the potential risk of contract breach if there is a regime change like in Nigeria. In this aspect, this research focuses more on regional characteristics to devise customized strategies rather than that of general or comprehensive plans for resource development overseas, and therefore the paper necessarily contains some logical weaknesses in refuting basic assumptions. For example, in the case of region-tailored plans for Russia and Central Asia, it is difficult to evoke a general consensus among experts because both business potentials and problems are inherent within the regions, and furthermore, it is not easy to establish a consistent policy due to an array of preferences and opposing opinions that become mingled into a complex mix. Nevertheless, in order to establish a realistic and pragmatic policy measure, we need to differentiate each plan according to characteristics of the respective regions and environmental factors, since such an approach seems more meaningful. For this reason, we should leave opposing arguments about relevant strategies and problems as major issues to be solved in the future.