A new and important debate on the role of manufacturing has recently emerged in advanced economies. Recovery of growth potential, job creation and response to economic crisis has become priority in most advanced economies. The global economic crisis has brought back into focus the need for a stable manufacturing base. Accordingly, many debates shed new light on industry policy in order to restore industrial competitiveness. In this context, this study reviews industrial strategies and policy measures taken by the European Union (EU) and its Member States and draws policy implications for Korea's industrial policy.

   While cross-border links by global value chain (GVC) have been densely developed among the European industries, they have experienced a decline in terms of production and employment in their economies at the same time. The share of the EU in global manufacturing production has declined considerably and this elicited concerns on its association with decrease in growth momentum and innovation in European economies. However, this ‘deindustrialization’ of European economies differs substantially from country to country. Among Western European countries, Germany has been successful in maintaining the importance of the manufacturing sector stable. As for the Central and Eastern European countries (CEECs), the level of deindustrialization has been low, due to the integration of their economies into the European production network after their accession to the EU. These various levels of deindustrialization have been reflected in macroeconomic indicators, such as in current account. For instance, Northern European countries have maintained or increased current account surplus, Southern European countries have recorded recurrent current account deficits. The contrasting performances of Northern and Southern Europe is reflecting industrial competitiveness. Particularly, Southern European countries have undergone difficulties in upgrading their industries to more technology-intensive industries.

   In order to enhance industrial competitiveness, the European Commission has been coming up with various policies encompassing cost and non-cost factors. In particular, Europe 2020, the EU’s growth strategy, was designed to create synergistic effects between different sectoral policies; industrial policies as well as policies for SMEs and R&D were simultaneously implemented. First of all, Europe 2020 suggests seven flagship initiatives: ① Innovation Union, ② Digital agenda for Europe, ③ Youth on the Move, ④ Resource efficient Europe, ⑤ Industrial policy for the era of globalization, ⑥ An agenda for new skills and jobs, and ⑦ European platform against poverty. Among them, Innovation Union, Digital agenda for Europe, An Industrial policy, and An agenda for new skills and jobs are directly related to the enhancement of industrial competitiveness.

   Currently, the EU is running Horizon 2020, the largest EU research and innovation programme ever with nearly 80 billion euros in funding available for 2014-2020. According to the European Commission, Horizon 2020 can be seen as an important means to create jobs, to stimulate economic growth and to improve quality of life. Despite SMEs' key role to boost the EU economy, it seems that both global financial crisis and the European sovereign crisis have rather been imposing heavy burden on SMEs. Therefore, the European Commission needed to take further and more significant measures to release the full potential of SMEs. As a result, the Small Business Act (SBA) and Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) were enacted.

   In order to examine industrial policy at the country level, this study reviews the cases of Germany, Sweden, Italy and Poland. Germany, with a strong background in manufacturing and being an important exporter in the global market, has been maintaining significant industrial competitiveness by expanding R&D expenditure and strengthening R&D cooperation. Based on the long-term and systematic plan, the German federal government has been establishing and implementing such strategies from High-tech strategy to New High-tech strategy as well as Industry 4.0. Together the federal government, the private sector and the academic community are participating in an active manner to execute the policies, and the satisfaction level of the German companies regarding government policy has been increasing. These policies are expected not only to reinforce the connection between science and industry, but also to eventually allow Germany to maintain the leading status in global competition.
  
   Huge amount of spending on R&D investment has played an essential role in improving industrial competitiveness of Sweden. Although most of R&D investment in Sweden had been made by business enterprises and universities, Swedish government has added on to further increase the volume of R&D expenditure and ratio of R&D performance since mid-2000. Meanwhile, through a mid-term blue print, The Swedish Innovation Strategy (Sweden 2020), the Swedish government provided directions and strategies to enhance national competitiveness. The main factor that enabled the Swedish industrial policy successful is the effective and practical cooperation between private and public sectors throughout the process; from designing and establishment of concrete industrial policies to their implementation.

   Italy has traditionally been known for the excellence of its goods and the luxury brands, based on the SME-centered industry. There are many family-owned businesses which existed for hundreds of years in Italy with good reputation. However, as the competitiveness of Italy has been waning over the last few years, the Italian government has came up with and implemented structural reforms as well as a variety of supporting policies. Among them, the Italian government launched two programmes, “Made in Italy” and “Destination Italy.” The former is about the globalization of SMEs, and the latter concerns the institutional improvement to facilitate FDIs. In addition, in order to reduce the financial burden of SMEs and to support start-ups, the Italian government created a guarantee fund.

   The promotion of FDI inflows was one of the most critical policy in industrial policies of Central and Eastern European (CEE) transition countries. FDI inflows related to privatization in the early stages of transition had a direct impact on employment and economic growth in the high marginal productivity of capital. And at the same time, it showed greater economic growth through promotion of technology transfer effect. Although there were some differences in initial conditions, CEE countries, including Poland were actively taking advantage of the FDI inflow to perform such policy regime change and economic reform. After the EU accession process, FDI inflows have been the backbone of its industrial policy, along with competitiveness in CEE countries.

   We have selected the automobile, the ICT sector, the pharmaceutical sector and the energy sector for the sectoral policy analysis. In these sectors, the European firms either have comparative advantage or strategic importance. Particularly, the European firms are under pressure from the challenge posed by emerging economies, which have been narrowing the gap with advanced economies. The automobile sector is a key industry with far-reaching forward and backward linkage. Nevertheless, the European automobile industry has been facing a slump ever since the global financial crisis. Some German manufacturers have been successful in maintaining the export volume owing to the stable and robust demand from China. French and Italian manufacturers, however, have lost important market share and were not able to reach pre-crisis levels in their production and sales. The European Commission established a consultative organization, CARS21, in order to develop concrete strategies, action plans and future regulations related to the automobile industries. The European Commission has placed an emphasis on developing more environment-friendly vehicles and is working to maintain a leading position in this sector. Notably, they tend to use their trade policy to impose or export their regulations, standards and norms in order to create more advantageous conditions for the European manufacturers. Moreover, they have recognized that the European automobile industry has over-production capacity and is trying to pursue smooth restructuring that is much more employment-friendly.

    The EU's industrial policy in the ICT sector is focusing on solving the social challenges on avail of the ICT. It is true that the ICT industry of the EU is less competitive than that of the US or Asian countries. This comprehensive approach that surmounts societal difficulties through ICT, nonetheless, is more meaningful than developing the ICT industry individually, since this strategy will lead to greater contribution in the long-run for sustainable growth.

   EU is an important market as well as an important exporter of the pharmaceutical products, and the member states located in the western part of Europe are especially dominant in this sector. Although the EU has a long history in the pharmaceutical sector, it is only after 2000s were the issues regarding enhancement of the competitiveness in the pharmaceutical sector been discussed at the EU level. The European Commission has suggested the development of the sector by adopting a scheme of Public Private Partnership (PPP). Correspondingly, the ‘Innovative medicines for Europe (InnoMed)’ project commenced in 2005-2009. From 2008 to 2013, ‘Innovative Medicines Initiative (IMI)’ has been organised and managed as EU's representative PPP project. Based on the positive assessment of the IMI results, ‘the 2nd Innovative Medicines Initiative (IMI2)’ will be implemented in 2014-2024. The EU is utilizing PPP to maintain market dominance in the pharmaceutical sector. However, the European Commission is not acting alone. It is important to emphasize that these PPP projects are being carried out by spontaneous participation, including financial support for R&D, by the European Federation of Pharmaceutical Industries and Associations (EFPIA) and the individual pharmaceutical companies.

    Existing EU energy policy has been focused on climate change and stable procurement of energy. But recently, the EU began to consider the problem from a consumer protection point of view related to energy costs. Costs caused by rising electricity prices, including support for renewable energy, had a significant impact on the energy consumption of industrial competitiveness. And also, the issue of energy prices and costs is unquestionably crucial for maintaining and developing a solid and competitive industrial base in the EU. Energy efficiency is rightly considered as the most effective way to respond to the increasing energy prices. The EU manufacturing sector still enjoys an considerable advantage in terms of energy intensity. In other words, the energy intensity improvements may have helped the EU industries to offset the price disadvantage. Therefore, improving energy intensity is expected to be the main axis of any future EU policy on industrial competitiveness.

   Korea is experiencing a status change from a country ‘catching up’ to one to be ‘caught up with’. It is difficult to deny that Korea's growth potential is weakening and its superior position in technology vis-a-vis emerging economies is shrinking. Therefore, European cases have policy implications for Korea as following. First, it is necessary to have scientific and technological achievement reflected in industrial capacity in order to secure marketability of the technology. German and Swedish cases are noteworthy in that both countries have surplus in the technology balance of payment. This is due to the fact that the scientific achievements can easily find outlets to the market via patents and trademarks. Germany's Hightech Strategy 2020 and New Hightech Strategy have focused on creating a nexus between science and related industries which can utilize scientific research results. Second, it is important to improve competitiveness of Korea's service industries and create a structure where competitive service industries support the manufacturing sector. Labor productivity of Korea's service industries remains far behind Western Europe and is particularly weak in finance, IT services, architecture/engineering and business services. Given that more service inputs are being utilized in manufacturing production, it is important to improve competitiveness of related service industries. Third, it is necessary to develop more measures to support or stimulate activities of the SMEs. It is important that the EU has been developing various support measures for the SMEs from fiscal support for R&D to support in networking between the SMEs and the research institutes. There is also the case where the Italian government launched “Made in Italy” and “Destination Italy” to enhance brand image of the domestic products produced by Italian SMEs. Fourth, development of GVCs, focusing on high technology, is critical. For more than a decade, the share of domestic content in Korean exports has decreased precipitously, particularly in the main export products. Compared to Germany and Northern European countries, the fall in Korea's exports is more salient. If it is the case that foreign content in Korea's exports show an increasing percentage of technology intensive products, this represents a truly worrisome phenomenon. In order to take advantage of ever-extending GVCs, it will be important to maintain a stable and competitive industrial base - industry of high technology - at home. In addition, greater attention should be given to provide high technology domestic contents to a third country's exports.

 Mexico is emerging as a new center of growth in the global economy. Some have taken to calling the country the “Aztec Tiger,” an analogy reminiscent of the “Asian Tigers” that led the economic miracle of East Asia. Mexico can attribute its recent economic surge to two drivers. First would be the nation’s swift growth into a global production base, backed by the enhanced competitiveness of its manufacturing industry. Improved competitiveness thanks to moderate wage increases, enhanced manufacturing productivity, a stable exchange rate, China’s ongoing loss of competitiveness due to rising wages, the US manufacturing renaissance, an extensive FTA network with 45 countries, and better business environments; these are the foundations upon which Mexico has been able to make the swift transformation into a global production base targeting not only North America, but also the South American and EU markets. The second driver would be the successful reform measures rolled out by the Peña Nieto government. Seen as the largest reform in terms of scale since the launch of NAFTA in 1994, Peña Nieto’s reforms have an extremely broad scope, from industrial structure reform in the energy, telecommunications, and financial sectors to institutional reform in education, tax and labor. These structural reform policies have been garnering special attention due to hopes that they may serve as a tipping point in the development of the Mexican economy. As it is, the reform measures are expected to propel the Mexican economy toward additional growth by up to 2 percentage points, maximum. Another reason Nieto’s policies are in the spotlight is because the formerly closed energy and telecommunications markets have opened up, possibly revealing huge business opportunities. There are even some observations that say the direct and indirect investment effect of opening up Mexico’s oil market will reach USD 1 trillion, and that it will have a more powerful economic impact than the US shale gas revolution.
Against this backdrop, the main purpose of this study is to provide comprehensive and strategic suggestions in order to enhance economic cooperation with Mexico given the recent dynamic changes in Mexico, including its emergence as a manufacturing powerhouse and successful structural reforms of the Peña Nieto government.
To this end, this study consists of six chapters. First chapter contains the purpose of this study, methodology, and literature review. The second chapter concerns Mexico's recent manufacturing surge, how it was possible and how it can be taken further. Also, in order to see whether Mexico's recent changes in manufacturing sector is sustainable or not, total factor productivity was measured at the industry level. Lastly, based on all these analysis, this study evaluates the substantiality of the manufacturing sector growth and the probability of economic development of Mexico.
In chapter three, major reforms that the Peña Nieto government has pushed forward are analyzed and evaluated in depth for policy implications: the background of these reforms and how these reforms were planned and implemented were considered in the first part. This study categorized all eleven reforms that the Mexican government is implementing, into two main ‘pillars’: structural reforms in industrial sectors and institutional reforms. For the structural reforms in the industrial sector, reforms in telecommunications, energy, and finance are discussed in depth; while for the institutional reforms, education, tax and labor reforms are scrutinized. On the basis of this analysis, implications of these reforms and how they could affect the Mexican economy in the near future are introduced.
In chapter four, the current state of economic cooperation between Mexico and Korea is evaluated. Divided into three sub categories, i.e. trade, investment, and institutions; economic cooperation is assessed comprehensively. In addition, the difficulties and obstacles facing Korean enterprises investing in Mexico were surveyed in order to elicit measures for improvement.
In chapter five, policy suggestions are specified to enhance economic cooperation with Mexico. Along with the surveys conducted on the difficulties experienced by Korean companies investing in Mexico, SWOT analysis is used in order to analyze the economic cooperation environment between Korea and Mexico. On the basis of the analysis, this study suggests four strategies for the Korean government i.e. converged cooperation strategy, win-win cooperation strategy, SME cooperation strategy and institutional cooperation strategy.
The four strategies to enhance economic cooperation with Mexico are listed below. The first would be a “converged cooperation strategy,” which creates the most powerful model for cooperation by merging the strengths that each country possesses in different areas. From the perspective of Korean companies, Mexico offers the advantage of being a forwarding base for manufacturing, and having a broad FTA network, that would serve as the basis for strategies targeting not only the North American but also the South American market. On the opposite side, Mexican companies can devise strategies to enter Asian markets, for instance China, by using Korea’s strength as a “gateway to Asia” on account of it being a logistics and FTA hub. The two countries could also draw from Mexico’s powerful political and economic influence over the Central American and Caribbean region and its experiences in development cooperation, and combine this with Korea’s experiences and know-how in successful economic development to formulate a triangular cooperation strategy providing joint assistance to neighboring countries.
Next would be a “win-win cooperation strategy” that utilizes Korea’s comparative advantage in technology and successful industrialization experiences to help solve the problems in the Mexican economy. Policies and projects that support insertion of Mexican components and materials industries into the global supply chain by transferring Korea’s economic development experiences and technologies will simultaneously resolve challenges facing Mexico’s manufacturing sector and create a friendly environment for Korean businesses seeking to enter the market. There should also be a cooperation program in education, along with science and technology sectors, which calls for swift improvements in order to support Mexico’s economic development. To this end, it will be necessary to host a “Korea-Mexico Education and Innovation Summit” attended by presidents of prestigious universities and research institute CEOs from both countries, as a channel to enhance mutual understanding and identify cooperation demand in the education and science and technology sectors. Another measure that may be necessary is the establishment of a joint job training institute run by the Korean government and companies in collaboration with the Mexican government, to help solve labor shortages in Korean companies operating in Mexico and to support the Mexican government in education of skilled manpower.
Third is an SME cooperation strategy. Enterprises will play a key role as an agent of cooperation in the expansion of economic cooperation between Korea and Mexico. SMEs, in particular, will play as much an important role as large conglomerates. This is because Mexico is a Latin American country with the highest number of Korean SMEs operating within its borders. As a demonstration of its strong interest in fostering SMEs, in 2014 the Mexican government founded INADEM (National Entrepreneur’s Institute). Priority measures to consider in expanding cooperation between Korean and Mexican SMEs are the establishment of a Korea-Mexico Technology Innovation Center, to support SME technology cooperation and exports, and the creation of a Korea-Mexico SME Forum to serve as a network for SME cooperation.
The fourth and final strategy would be to form a basis for institutional cooperation. The best institutional infrastructure for expanding economic cooperation with Mexico is an FTA. Since 2008, Korea-Mexico FTA negotiations have been stalled following Mexico’s decision to halt discussions, and have yet to be resumed. The grounds for this decision were that an FTA with Korea would bring more harm than good, due to the unfavorable balance in trade from Mexico’s viewpoint. Fortunately, the Korean government’s announcement to join the TPP (Trans Pacific Partnership) has rekindled the possibility of concluding an FTA with Mexico. As important as an FTA is, so is opening a direct flight route between the two nations. Not only would this save travel time and airfare, but it would also be a meaningful step that narrows the psychological distance between the people of Korea and Mexico.
In the concluding chapter, the summary of the results, limitations of this study and possible future research are proposed.

This study aims at analysing the current status of the Iniciativa para la Integración de la Infraestructura Regional Suramericana(IIRSA) and eliciting implications for Korean policy toward such initiatives.
IIRSA is an infrastructure construction project of massive scale originally organized by 12 South American countries at the First Summit Meeting of South American Presidents at Brasilia in August of 2000. Enrique Cardoso, then president of Brazil, was the lead proponent of such a project. Later, at the third summit of 12 countries, 335 projects were selected to be included in the IIRSA portfolio and 31 among them became priority projects, which were later called AIC(Agenda de Implementación Consensual). AIC contains 28 projects in transportation, 1 energy development project and 2 communications projects. By 2010, the number of projects that IIRSA planned to pursue reached 524 and the amount of investment earmarked for these projects was estimated to be more than 96 billion dollars. The priority projects comprising the AIC showed good level of completion by 2014.
In 2008, with the launch of UNASUR(Unión de Naciones Suramericanas), IIRSA experienced changes in its system and organization. The third summit of UNASUR in 2009 decided to organize COSIPLAN(Consejo Suramericano de Infraestructura y Planeamiento) and incorporate the IIRSA. COSIPLAN, which absorbed IIRSA as an important element in its development strategy, maintained the basic structure of IIRSA such as AICs and its main goals. In October 2012, COSIPLAN covered 583 projects in transportation, energy, and communications. Its total investment is estimated to reach 157.7 billion US dollars. In addition, COSIPLAN selected its priority projects, called APIs (Agenda de Proyectos Prioritarios de Integración). In 2013, COSIPLAN selected 31 structural APIs and 101 individual APIs, whose investment was over 16.7 billion US dollars.
According to this study, the purposes of the IIRSA are as follows. First of all, the purpose of IIRSA is to improve competitiveness of South American countries by reducing the transportation cost, as evidenced by the concentration of projects in the field of transportation. Especially, it is a move taken in South America as a response to the growing importance of East Asia, especially China, in the global trade. The other purpose of IIRSA is to contribute to the integration of South America in line with the globalization of the world economy. By doing so, South American countries seek to expand intraregional trade, which is rather smaller in comparison to that of other continents.
The political background of the inauguration of IIRSA turns out to be important. One element which made IIRSA possible was the fact that most South American countries had established a stable democratic system. Every country which currently participates in IIRSA agreed on the principle of democratic governance and maintenance of the system. Such political agreement facilitates negotiation and cooperation among member countries. Peaceful and harmonious regional atmosphere also serves as fertile soil for successful inauguration and development of IIRSA. In the 1990s, conflicts among countries in South America occurred rarely and, if it did occur, was resolved within an institutional framework. In sum, common economic goals and political setting shared by South American Countries became important elements to achieving a bigger goal: integration of South America.
IIRSA is organized into 10 Integration and Development Hubs, which play an important role in improving infrastructure of South America, both in IIRSA and COSIPLAN. According to this research, Amazon Hub, Mercosur-Chile Hub, Andes Hub, Peru-Brazil–Bolivia Hub receive relatively large amounts of investment. Among three major areas of IIRSA, transportation turns out to be the most salient area, especially port and road construction. Some hubs are more active than others because of its necessity for investment yet, considering the dominant influence of Brazil in South America, the presence of Brazil in the projects is often closely related to their success or failure. In other words, IIRSA projects which include Brazil or its neighboring countries tend to receive more investment and make better progress. Therefore, Brazil’s efforts to participate and maintain the IIRSA often determines the substantiality of the projects.
IIRSA presents us with various lessons regarding regional integration efforts of South America. First of all, IIRSA certainly contributes to economic development of the region by improving its competitiveness. It is also expected to reduce regional inequality. In other words, by incorporating relatively isolated areas to the center of economic development with improvement of infrastructure, IIRSA lessens inequality, which has been noted as one of the major features which characterize South America.
Furthermore, IIRSA will be a basis for regional integration of South America with the expansion of Mercosur, strengthening of CAN, integration of CAN and Mercosur, and integration of Guiana and Suriname to the regional institutions, which lead to increased regional flow of products, labor, culture and tourism. The integration of geographical and economic integration will lead to political integration of the region.
However, according this study, IIRSA is not entirely rosy in terms of its future picture. First concern is related to the environmental issues. Most of the projects involve transcontinental construction, especially that of bi-oceanic projects, which ultimately alter or contaminate the environment of relatively undeveloped and undisturbed areas such as the Amazon basin. Such massive construction projects highlight the importance and also difficulty of achieving cooperation among civil society, local community, and development agencies. EASE methodology of COSIPLAN represents such efforts. Secondly, the major role played by Brazil in IIRSA could be a risk factor. The active participation of Brazilian companies and financial institutions in IIRSA could be interpreted as an act of new imperialism, which make other countries of South America dependent on Brazil.
IIRSA gives us various lessons regarding policy implications. First, IIRSA and COSIPLAN offer us an opportunity for the Korean construction industry to make advances in the South American infrastructure market. Secondly, participating in infrastructure construction projects in South America will enhance Korea’s chance to become a part of energy infrastructure projects, which would work positively toward resource diplomacy. Third, IIRSA and COSIPLAN projects serve to diversify Korea’s infrastructure construction business. Currently, Korea’s infrastructure projects in South America focuses on plant construction. By participating in IIRSA and COSIPLAN, Korean companies would be able to enter the field of transportation construction including roads, ports, and airports.
On the other hand, various difficulties mentioned above regarding IIRSA demand that we diversify our strategy. This study suggests three strategies: Governmental investment in the infrastructure projects by using ODA, Formation of consortiums with local companies, and Cooperation with international development agencies. First, ODA should be considered as a valid way to provide support at a governmental level for Korean companies in making entry into the South American infrastructure sector. Considering the investment structure of IIRSA/COSIPLAN that 74.5% of its projects and 54.1% of its investment come from public sources, ODA allows Korean government to have better access to the infrastructure construction projects.  The second strategy in entering the infrastructure construction market is to form a consortium with local companies. This is particularly important because the majority of IIRSA projects, despite being transcontinental, consists of individual projects. For example, 82.5% of COSIPLAN projects and 82.7% of its investments is concentrated on individual projects, which is executed by an individual country. Under such circumstances, to minimize mistakes and maximize efficiency, close cooperation with local companies would be indispensable. Third, strengthening cooperation with international development agencies that provide financial and technological support to IIRSA is crucial. Especially, working closely with IDB, CAF, and FONPLATA, would allow us not only to financially participate in IIRSA projects but also acquire the network which plays a vital role in boosting our status in the South American infrastructure sector.
Finally, this study suggests that Korea needs to make more decisive and prompt efforts to enter the infrastructure market in South America. Also it informs us of the strong FDI attractiveness of the South American infrastructure industry.

This research examines Japan’s FTA strategies, focusing on Japan’s 13 effective bilateral FTAs, and ongoing negotiations on the TPP and the EU-Japan FTA. Especially, this research sheds light on the differences between the ongoing two FTA negotiations and Japan’s 13 existing bilateral FTAs in terms of Japan’s FTA strategy.
Chapter two analyzes the GVCs of Japanese companies from 1995 to 2011 based on EU World Input-output Tables (EU-WIOT). The results are as follows.
Firstly, RCEP including China is the most important economic cooperation partner for Japan, as it is for Korea. In 2011, out of Japan’s total value-added export, the RCEP-5(South Korea, China, Australia, Indonesia and India) accounted for 27.7% which is larger than the 21.7% forTPP-4(the US, Australia, Mexico, and Canada). The result implies that in terms of GVCs, concluding a regional FTA in East Asia involving China is advantageous for both Japan and Korea.
Second, most of Japan’s exports of final goods contribute to producing domestic intermediate goods. In 2011, 291.8 billion dollars of Japan’s final goods exports led to 485.9 billion dollars of intermediate goods production at the global level. However, out of the total amount, production of foreign intermediate goods represented only 22.1% while the share of Japanese goods was 77.9%. In value added terms, out of the total amount, 297.6 billion dollars or 85.7% are returned to Japan compared to 61.9% for Korea. This result shows that Japan’s intermediate goods production network is better developed than that of Korea. Japan has highlighted tariff elimination and cumulative rules of origin to maximize export enlargement effects following the FTA expansions.
Third, Japanese manufacturers have maintained its competitiveness even in the late 2000s. Japanese RCA in value added had remained around 0.76 to 0.79. Also, even though Japan’s total exports is only 1.48 times larger than that of Korea, Japan’s value-added exports is 2.22 times larger than Korea’s. It shows that Japanese exports has created a high rate of domestic value added, and implies the Japan’s FTA could shortly bring more value-added into the domestic production and employment effects.
Chapter three outlines how the Japanese government exploits FTAs in major negotiating chapters including tariff, rules of origin, service trade, intellectual property rights, etc., so as to expand GVCs of domestic enterprises. Also, this chapter examines the utilization of signed FTAs. The results can be summarized as:
First, although the Japanese government emphasizes comprehensiveness and high level of liberalization in the 13 effective FTAs, their actual level of liberalization is low since they have chosen the FTA partners so as to protect their agriculture, fisheries and livestock markets.
Second, 72 types of complex rules of origin in FTAs by Japan lower the utilization of FTAs by increasing burdens on Japanese companies to achieve the certificate of origin. To lighten the burden, the government introduced ‘autonomous certificate system for Customs Approved Registered Exporter’ to the Japan-Switzerland FTA and applied the system both to Japan-Peru and Japan-Mexico FTAs. However, challenges remain for the government to unify rules of origin and seek an effective way to utilize cumulative rules of origin.
Third, despite the dramatic increase in the number of certificates of origin issued by the Japan Chamber of Commerce and Industry and the growth of Japanese companies’ FTA utilization rate from 36.2% in 2009 to 42.9% in 2013 according to the JETRO survey, the FTA utilization rate of Japanese companies is still low. It is mainly caused by low liberalization level of signed FTAs. In fact, even goods receiving preferential tariff often could not benefit due to the rules of origin, high cost and complex process for a certificate of origin, and lack of information on the FTA procedure system.
Chapter four divides major issues of the TPP-12 negotiations into market access for goods and rules, then examines Japanese strategy in the TPP-12 negotiations. The results are as follows:
Firstly, it is hardly possible to sign the TPP by the targeted deadline at the end of 2014, but still the US-Japan negotiations are critical to concluding the agreement. The TPP, a multilateral FTA, could also be considered a bilateral FTA between the US and Japan. It is because with respect to negotiations on tariff and intellectual property rights, Japan’s acceptance of American demands would determine the results. Also, concluding the bilateral negotiation on market access on agriculture and livestock is a prerequisite, even though it is uncertain whether other participants would accept the settlement.
Second, Japan’s TPP strategy can be summarized as mutual protection allowance for the US Automobile market and Japan’s agricultural market. This Japanese exchange strategy had been effective until Japan’s official declaration of participation in the TPP, in February of 2013. However, at the moment, the end of 2014, the strategy seems to be losing strength. For instance, the TPP negotiations for tariffs and safeguards on pork, beef, and dairy products included in the main 5 items of agriculture and livestock industry are facing difficulties even at the working level consultation with the US.
Chapter five analyzes the main issues of the ongoing FTA negotiation between Japan and the EU and countermeasures of the Japanese government. Two results are revealed as below:
Firstly, the EU-Japan FTA is expected to be more comprehensive than recently concluded FTAs such as the EU-Korea, and the EU-Singapore. Negotiations for the EU-Japan FTA handled various issues; overall commodity trade including tariffs, technical barriers to trade(TBT), sanitary and phytosanitary measures(SPS), service trade, e-commerce, investment, government procurement, intellectual property rights, competition, trade and sustainable development, conflict resolution, non-tariff measures, rules of origin, customs clearance facilitation, geographical indications, animal welfare, corporate governance, business environment, and so on.
Second, the biggest issue in the EU-Japan FTA negotiation is the reduction or elimination of non-tariff barriers. For the EU to balance benefits against Japan which has low tariffs, it would need an effective strategy in demanding that Japan remove its non-tariff barriers. However, regulatory reforms of the Japanese government are limited to regulatory harmonization, trade facilitation and streamlining customs procedures. Ultimately, the pace of the FTA would be dependent on Japan’s reduction of non-tariff barriers and the EU’s acceptance of that level. Therefore, Japan should especially promote regulatory reforms among structural reforms known as the ‘third arrow’ of Abenomics. At the same time, the government needs to deal with harsh demands from Mega FTAs regarding non-tariff barriers.

 Africa has received 1.4 trillion USD in aid over the past 60 years since the wave of independence witnessed across the continent in the early 1960s. However, there is still much discussion and controversy over the effectiveness of development aid, as many African countries have not been able to escape poverty. While other aid recipients in Asia have achieved industrialization through agricultural development, Africa remains unable to replicate the success in Asia, as reflected in the continent’s unresolved food security problems.
Why is it so difficult for Africa to escape the ‘poverty trap?’ This is because development conditions are different from that of other developing regions. Naturally, given conditions that include a tropical climate, lack of water resources, barren soil as well as ethnic and religious conflicts, poor infrastructure, absence of human capital, lack of national will to develop, and outdated concepts on labor and work values, make for a very complicated and diverse reality with respect to African poverty.

As China is undergoing a rapid shift in paradigm of its economic growth from an export-driven one to one focused on domestic consumption in the wake of the global financial crisis, the consumer market in China is expanding gradually, especially in the new emerging cities. Foreign companies, which had mostly based their marketing centers in first-tier mega cities such as Beijing and Shanghai, are now competing to enter those new emerging cities. Despite such developments, however, South Korean companies are still tied to the coastal area, where most of the first-tier cities are located, with respect to their entry into the domestic consumer market in China. And the insufficient information available about the local market, combined with the lack of distribution channels and deteriorating brand competence, is hindering their efforts to develop their own domestic consumption market.
Given the backdrop involving such shifts in the economic climate, this study is aimed at analyzing the characteristics of the consumer market in the new emerging cities in China and coming up with recommendations with regard to strategies for entering them. This study contains two important  differentiating factors: 1. The first point of the study that differentiates it from the rest is that it analyzed the consumer market with its research focus on the specific, ‘micro’ consumer attributes limited to 10 target cities in China, instead of reviewing all major metropolitan areas; 2. This study performs a one-on-one survey and case study in terms of its research methodology, while also applying key management theories such as consumer behavior model, 4P and STP strategy.
Equipped with such differentiating factors, the ten emerging cities in China were selected based on a quantitative method followed by interviews with local consumers in the emerging cities to identify their characteristics. Especially, a case study on the South Korean companies operating in China was performed through in-depth interviews with company officials working in companies with a local presence in China.
For this study, a total of 287 Chinese cities at the prefecture level and above were classified into 4 levels while considering their respective consumption scale and growth indicators, and selected the cities that satisfied the definition of the emerging city.  For the consumption scale indicator, three variables including per capita GRDP in 2011, the size of the consumer market (total retail sales of consumables) and size of the potential market (per capita disposable income × population in the urban center) were considered, while the annual rate of increase of the said variables from 2009 to 2011 was assumed as the growth potential. And the top 50 cities as measured by their consumption size were excluded to pick out actual ‘emerging cities’; and the high-growth cities were selected from the selected 50 cities, while the cities overlapping geographically were excluded from the pool. The emerging cities selected through such filtering process include: Second-tier cities such as Chongqing(重庆), Ordos(鄂尔多斯), Chengdu(成都), Changsha(长沙), Daqing(大庆), Xi’an(西安) and Zhengzhou(郑州), and third-tier cities such as Nantong(南通), Jiaxing(嘉兴) and Hefei(合肥).
And to identify the consumer characteristics of the 10 emerging cities selected, 50 consumers from each city were surveyed for their consumption pattern, consumption characteristics and their perception on and assessment of South Korean products, with the survey results being analyzed with such statistical methodologies as frequency analysis, ANOVA and regression analysis.
First, the result of the frequency analysis shows that consumer products with relatively larger shares in the total consumption includes grocery, daily necessities, clothing and fashion products whereas in the service segment the expenditure on transportation/communication, eating out and culture/entertainment took the largest share in the total consumption. The purchase channel of those consumer products differed slightly by product category such as grocery, cosmetics, clothing/fashion products and home appliances, while the use of online channel was also active.  The respondents valued quality, followed by the price, in making the final purchase decision, while relying mostly on the Internet in collecting information on the products. And they were interested in ‘green’ and well-being products as much as in other products. After analyzing the eight different tendencies that are related to consumer psychology including conspicuous consumption, impulsive purchase, pursuit of the latest trends, price sensitivity, curiosity toward new products, preference for imported brands, preference for specific brands and level of trust in advertisement, the consumers in the emerging cities valued practicality and self-satisfaction, and their sensitivity to price increases was not high though they did respond somewhat to price increases. They displayed significant interest in new products and did not place much importance on whether they were imported or Chinese brands. And they would easily switch to other brands even though they did have established preference toward certain brands, while they did not put much trust in advertisements. They showed the greatest amount of interest toward purchase of Korean products though their perception on South Korean products was lukewarm, at best. The deciding factors in purchasing the South Korean products were quality and design. They also had an interest in buying such Korean products as clothing/fashion, digital products and cosmetics. When other competing foreign products are compared with the South Korean counterparts in terms of quality, design, price, and brand, the South Korean products were evaluated to be competitive in design, price and brand, but these consumers answered that South Korean products were just so-so in terms of quality and service. Such consumption patterns and tendencies as well their perception and assessment of South Koreans products differed depending on cities and demographical characteristics (sex, birth year, income level and others).
Meanwhile, an empirical analysis performed to identify the impacts product characteristics had on the consumers’ purchase behavior proved that such characteristics do have an influence on their purchase of South Korean products, thereby validating the consumer buying behavior theory.
When the marketing cases of the companies from South Korea, Japan, and Taiwan that entered such emerging cities were analyzed along with consumer characteristics in the emerging cities from the perspective of 4P and STP, the companies from each country strove to attract customers by differentiating their products and services (Product aspect). And South Korean companies were utilizing ‘green’ and Korean Wave actively, while attempting to differentiate their products and brand image by developing new products customized for each region. Also, companies from various countries were pricing their products in accordance with the product characteristics and competitiveness (Price aspect). In terms of Place, companies from various countries selected store locations by considering the product attributes and convenience of customers in visiting the store. Regionally, Japanese and Taiwanese companies entered the first-tier cities followed by expansion into second-tier and third-tier cities, thereby closing on their target region. In terms of Promotion, Taiwanese companies were utilizing various methods of competition related with their business, whereas South Korean companies were not up to that level.
Next, in terms of STP, companies from various countries segmented their customers in accordance with their respective income level, tastes, age level and life style (Segmentation aspect), before narrowing down their customer group by their product type with their target focused mainly on the middle income class or over (Targeting aspect). And they were positioning themselves among the customers by highlighting country-specific product images and through provision of unique services (Positioning aspect).
Based on the results of such analysis, this study came up with recommendations regarding the strategies required to enter the emerging cities as below:
 1. Some of the promising areas companies may enter are - clothing/fashion, cosmetics, digital products, general home appliances and processed foods in the consumer products, and eating out, culture/entertainment, beauty/health and medical care in the service sector. 2. Companies are required to improve product competitiveness in terms of 4P perspectives and utilize the green/well-being marketing actively while utilizing the psychological factors as well such as pursuit of the latest trends and curiosity towards new products (Product & Price strategy). With regard to placement strategy, the store location should be selected by considering various factors comprehensively such as commercial supremacy, parking convenience, entrance of similar and related competitors to the market and target segment, while the establishment of the distribution channel would be more effective when implemented through indirect sales channel such as commercial agents. And the distribution channel should be selected depending on the item; active use of online channels is also recommended. In terms of Promotion strategy, it is also recommended that products be publicized via WeChat and utilize the recent popularity of Korean Wave. Third, it is necessary to come up with customized market entrance strategy by segmenting the customers according to their sex, birth year and income level. And it is recommended to target women, those born in the 1980's and 1990's and income brackets higher than the middle-income group. Fourth, as there are differences among those emerging cities in terms of consumption patterns and characteristics, perception and assessment on the South Korean products, it is also required to come up with customized entrance strategy by identifying the characteristics of each emerging city.
 
Meanwhile, it is necessary for the government to expand its R&D investments to strengthen product competitiveness and enhance the country image, while also laying the groundwork for entering the online and offline distribution networks. And the government needs to provide PR support and settlement in the local cities for Korean companies while also expanding their effort to achieve overseas expansion.

This report intends to investigate the level of liberalization in services sectors of countries  participating in the TPP(Trans-Pacific Partnership) by analyzing revised offers in the WTO DDA and regional trade agreements they have agreed upon, and then suggest possible strategies for Korea regarding the ‘schedule of commitments’ negotiations in the services area of the TPP.
In order to achieve the aims stated above, the following four aspects of services agreements are investigated in this report: TPP-relevant issues and topics in services provisions, revised offers to WTO in the Doha Development Agenda, reservations list of TPP members’ FTAs after their DDA revised offers, and services trade restrictiveness index published by the OECD. The first chapter  briefly overview the overall report. The second chapter introduces and examines the major issues of provisions in recent services negotiations, especially ones frequently raised after GATS, inter alia, most favored nations, national treatment, local presence, market access and progress requirement. The third chapter analyzes revised offers of TPP members submitted for the Doha Development Agenda negotiation in 2005, which indicate the general level of liberalization in services sectors of the TPP members. The analyses of revised offers elicit useful insights showing that commitments in national treatment are more liberalized than those in market access, commercial presence is generally the more preferred method of liberalization than cross-border trade, and the level of liberalization of Korea ranks around the middle among TPP members. The fourth chapter investigates FTA services agreements of major TPP members (Australia, Canada, Japan, and the United States), focusing especially on their reservations lists offered following the negative list approach. These countries have already liberalized services markets at a high level in the WTO DDA (or NAFTA in the case of the U.S.) and hence have not shown much progress in those sectors already recognized in subsequent FTAs. However, attention needs to be paid to their positions regarding the liberalization in ‘new services’. The United States have reserved the rights to adopt measures specified only for market access in new services and hence remain relatively flexible to further liberalization. On the other hand, Japan placed the ‘new services’ in Annex II and hence maintained their rights to adopt new discriminatory measures, in attempts to delay further liberalization in newly emerging services. The fifth chapter investigates the level of services liberalization in a more synthetic and holistic fashion by analyzing services trade restrictiveness index (STRI) published by the OECD in 2014. The results show that the restrictions in market access have remained the single largest obstacle to services trade. Especially, sectors showing low levels of liberalization tends to have more market access restrictions. In addition, restrictions on the movement of natural persons tend to appear more in professional services. Finally, based on those analyses, the last chapter suggests sectoral negotiation strategies and policy implications. In professional services, Korea still remains relatively restrictive on mode 4 (the movement of natural persons) issues than others; however, since the United States who leads the TPP negotiation has not been active in this matter, Korea is not expected to face pressures for further liberalization. Regarding courier services, Korea needs to clarify the scope of universal/monopoly postal services. In telecommunication, it is expected to properly respond to new provisions such as ‘net neutrality’ or 'flow of information.' Also in audio-visual services, the Korean government needs to think about the domestic responses regarding market access in newly emerging services through TPP agreement.

    The pace of reform of China's state-owned enterprises and industrial restructuring is currently accelerating under the leadership of Xi Jinping. This research, through the analysis of enterprise competitiveness, business diversification, and industrial concentration, aims to forecast the direction of reform of state-owned enterprises in China and draw implications for South Korea.
This research is comprised of six chapters. Following the introduction, chapter two summarizes the current status regarding the progress of the reforms. Firstly, types and current status of state-owned enterprises are described, and events after the Chinese economic reform are arranged chronologically. Though greatly reduced in number, state-owned enterprises still have less total industrial enterprise operating income and profits compared to private enterprises, meaning the efficiency of management has yet to be improved. The new government under Xi Jinping stated their decision to promote state-owned enterprise reform in the Third Session of the Eighteenth Central Committee of the Party and the two sessions (National People's Congress and Chinese People's Political Consultative Conference）of 2014. From this, central focus of state-owned enterprise reform can be summarized as aggressive pursuit of mixed ownership. Cautious and gradual methods are expected to take place through various trial measures, and reform at the level of provincial government is likely.
Chapter three contains the analysis of relations between Chinese corporate governance and performance, using scales such as productivity and profits. Database used for the analysis was from 571 enterprises listed in stock market A from 2004 to 2013. The result of the analysis is as follows. First, human capital makes significantly greater contribution to productivity in private than in state-owned enterprises. On the other hand, state-owned enterprises show greater contribution from physical capital to productivity relative to private enterprises. Second, Chinese enterprises listed in stock market A were found to have a higher ratio of shareholders; and lesser the supervision by State-owned Assets Supervision and Administration Commission, greater its profits.
Chapter four assesses how well China's state-owned enterprise have promoted business diversification, among different types of businesses, and whether promotion of diverse business has led to sufficient profitability. First, this study shows that the level of diversification and especially relevant diversification has shown to be increasing, but not irrelevant diversification. Irrelevant business diversification is actually declining rapidly Second, the number of unprofitable, non-profit fields with sales is higher in relevant fields of both private and state-owned enterprises. Third, analysis of sales versus profitability reveals that state-owned enterprises have greater irrelevant fields, while private enterprises have greater relevant fields. In summary, the number of profitable fields and sales are proportional in state-owned enterprises, where as in private enterprises, the relationship is inversely proportional.
Chapter five contains a brief analysis of the correlation between state-owned enterprise reform and industrial policy. Generally, the level of integration in Chinese industries is low and unidentical industry-wise, industrial restructuring such as Mergers and Acquisitions(M&A) are found to be in tune with policies aimed at promoting state-owned enterprises. Likewise, five industrial fields including petrochemicals, automobile, retail business, steel and shipbuilding industry are selected for analysis on 1) current status and future directions, 2) competitiveness based on industrial concentration, 3) directions of private enterprise within industries and 4) implications for South Korea.
This research proposes that the key to state-owned enterprise reform is mixed ownership, and when executed successfully, would bring forth tremendous change in China’s ownership system. State-owned sectors made open and accessible to private capital would disperse management risk, followed by optimization of management and investment policy. Moreover, both business diversification and industrial concentration of state-owned enterprises are expected to occur. As far as diversification of state-owned enterprises is concerned, irrelevant fields of state-owned enterprises would more likely to experience diversification than relevant fields.
Nevertheless, limitations and shortcomings of state-owned enterprises are as follows. First, directions of mixed ownership differs by industrial field and mixed ownership might appear only in some industries. Second, state-owned enterprise reform may place heavy emphasis on state-owned enterprises and possibly favor state-owned enterprises. Generally, limited private capital is rarely considered to be used in taking over absolute share of a state-owned enterprise. In fact, state-owned enterprise is more likely to merge with and acquire (M&A) an internally stable private enterprise during the transition to a mixed ownership.
Implications for South Korea are that opportunity for both intense competition and cooperation coexist. Firstly, South Korean enterprises already in China would enter into more intense competition not only in the Chinese domestic market, as competition with Chinese enterprises would also become more intense in the global market, thereby requiring Korean enterprises to be prepared. Therefore, the need to make provisions for strengthening regulations and  enforcement of laws regarding state-owned enterprise reform is very high. Secondly, globalzation of Chinese enterprises could provide an opportunity for South Korean enterprises for cooperation and as a consequence, would lead to enlargement of the market. Within the industry, growth of Chinese enterprises has led to increased cooperation and it may have a positive impact through bilateral trade and investment expansion.

Korea and India established their diplomatic ties in 1973 but economic cooperation between the countries began in earnest after India’s economic reform in 1991. In particular, the economic cooperation was intensified as the Indian economy was opened up further and experienced high economic growth since 2000, which led to remarkable success of the Korea-India CEPA (Comprehensive Economic Partnership Agreement) implemented in January 1, 2010. India has aggressively expanded its FTAs as it concluded 13 RTAs (Regional Trade Agreements) with 25 countries and has been negotiating or reviewing agreements with several countries including the EU. Narendra Modi government inaugurated in 2014 has given priority to the quality aspect of FTAs rather than the quantity aspect that was emphasized by the previous government. Prime Minister Modi announced that the FTAs signed by the previous government in the last ten years have benefitted the partner countries but not India in terms of quality and volume of trade. Therefore, it is expected that the Indian government will further pursue its actual benefits with its practical FTA strategies.
This report analyzes the effects of India’s FTA enlargement on the trade between Korea and India. Especially, it focuses on the Korea-India CEPA and the Japan-India CEPA while giving consideration to high competition in the Indian market between Korea and India.
In Chapter 2, this report examines the Indian government’s trade policies including FTA policy. It also compares and analyzes ‘pillars’ including background, merchandise, service, investment, and others among FTAs already implemented by India. Next, it compares the Korea-India CEPA and the Japan-India CEPA in greater detail and presents similarities and differences between the two FTAs, focusing on disadvantages that Korea faces or will face.
In Chapter 3, simulations are performed using the World Bank SMART to analyze how expansion of FTAs by India affect the Korea-India trade and shows changes in import, tariff revenue and consumer surplus of India as well as changes in export by Korea. The report performs simulations not only for the entire economy but also for specific items (HS 2 or 6) and provides estimates for each case.
Using the results from the chapters 2 and 3, the report suggests a method for setting priorities among the list of items in the future Korea-India CEPA upgrade negotiations. The authors hope that the results from this report will be utilized as a useful resource to upgrade the Korea-India CEPA.

With only a year left on the timeframe set for the conclusion of the Millennium Development Goals(MDGs), the international community is actively in the process of developing a new framework which will set the tone for the international development scene after 2015. Centering on the values of human rights, equity, and sustainability, the Post-2015 Development Framework is expected to show a mid- to long-term vision in tackling global challenges and environmental changes in line with the establishment of the Sustainable Development Goals (SDGs).
One of the most significant features of the current discussion on the Post-2015 development agenda is its particular focus on the means of implementation for the new goals in the Post-2015 era. As a means of implementation, financing for development is deemed central to achieving the goals. Considering the current circumstances where the international environment is changing rapidly while new challenges arise, additional financing is absolutely necessary in the pursuit of renewed development goals. As a consequence, Korea must expedite progress in expanding the development agenda as well as increasing finance for development.
In this regard, this policy paper aims to review the discussion on increasing financial resources for development and seeks to draw implications for Korea in order to respond appropriately to the issue. For these purposes, this report first provides an overview of the chronology of discussions on SDGs and analyzes international observations on the scale of finance necessary for achieving the SDGs. Then we further explore some technical details on financing for development, including the modernisation of the ODA definition and new measure of total official support for sustainable development. The paper moves on to seek various ways of utilizing public support to stimulate private sector resource mobilization. By conducting case studies on development finance mechanism of the German KfW Development Bank and France Development Agency (AFD), the report provides insights on additional types of financing, such as blended financing, guarantees, capital subscription, and mezzanine finance.
In conclusion, the paper suggests some policy measures to efficiently raise resources to finance the Post-2015 development framework; First, greater emphasis should be placed on expanding and utilizing other official flows(OOF) as well as ODA instruments from the view point of private resource mobilization. This effort should not become a way to avoid the pledges to increase ODA volumes, but rather an additional form of effort to effectively incentivize and leverage private sector investment for financing sustainable development goals. Also, domestic financial institutions for development such as the Economic Development Cooperation Fund (EDCF) need to propose and share various financial instruments and wide-ranging expertise to strengthen public-private partnership for international development cooperation programs. Lastly, the paper suggests measures to connect climate finance with financing for development, which is imperative to the post-2015 framework.