Policy Analyses
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Policy Analyses
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Benefits and Costs of Agricultural Liberalisation in Korea
David P.Vincent et al. Date 1997.12.30
Agricultural policy, Free tradeDownloadContentContents
Summary
1. Introduction
2. Korea's Agricultural Protection Regime
3. Influences for reform
4. Measuring the effects on the Korean economy of Korea's agricultural protection
5. Effects on Korea's trading partners
References
Appendix A : Details of Korea model
Appendix B : The version of the GTAP model used
국문 요약
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Northeast Asia's Transboundry Pollution Problems : A Pragmatic Approach (97.12)
The progress of existing institutions for Northeast Asia's transboundary pollution problems is not satisfactory so far. The question concerns which type of institutional and financial arrangement should be chosen. This study consi..
Sang-Don Lee et al. Date 1997.12.30
Environmental policyDownloadContentSummaryThe progress of existing institutions for Northeast Asia's transboundary pollution problems is not satisfactory so far. The question concerns which type of institutional and financial arrangement should be chosen. This study considers the institutional and financial arrangements for the transboundary pollution problems in Northeast Asia as the cost allocation and cost efficiency problem among the countries in the region. The cost allocation problem refers to the question of who should bear the cost of emission abatement required to avoid environmental aggravation in the region. The cost efficiency problem seeks the most efficient way to mobilize financial resources while giving economic incentives to those who undertake projects. These two problems are related. However, if possible, the separation of the efficiency issue from the cost allocation issue may alleviate the bottleneck of the cooperation. Based on the estimates of transboundary transportation of pollutants in the region, an example of cost allocati
on guided by a commonsense rule, and an example of the incentive for international fincncial transfers, bilateral and regional, are provided. The result supports the superiority of a regional mechanism to a bilateral one. Existing institutions' performances are evaluated from this viewpoint. The authorss suggest more flexible and pragmatic approaches in seeking efficiency. They include the consideration of APEC as a potential ancillary forum for the issue, the use of innovative financing methods involving private sectors, and wider use of economic instruments. At the same time, the existing intregovernmental body addressing the issue should preserve its central role for the issue with a clearer and higher, but flexible mandate.
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Regional Intergration and Liberalization in the Asia-Pacific
This study examines how strongly the Asia-Pacific region is interconnected through trade and investment, and analyzes the welfare implications of regional trade and investment liberalization in the APEC process. It is shown in thi..
Jai-Won Ryou et al. Date 1997.12.30
Economic integration, Free tradeDownloadContentContents
I. Introduction
II. Issues in Regional Trade and Investment Liberalization
1. Compatibility of Regionalism and Multilateralism
2. Political Economy of RTAs
3. Desirability of Open Regionalism
III. Patterns of Trade Flows in the APEC Region
1. Trade Flow Matrix
2. Specialization Structure
3. Export Similarities
4. Services Trade
IV. Trends and Patterns of FDI Activities in the APEC Region
1. Regional FDI Flows
2. FDI by the EU, Japan and the U.S.
3. FDI and Industrial Adjustment
V. Welfare Effects of Liberalization
1. Resource Allocation Effects
2. The Pro-competitive Effect and the Scale Effect
3. Intertemporal Substitution Effects on Savings and Investment
4. Total Effects of Liberalization
5. Implications for Income Convergence
VI. Barriers to Regional Trade and Investment Liberalization
1. Assessment of Barriers
2. Trade-Restrictiveness Indexes
3. Distortionary Effects of Investment Impediments
VII. Summary and Conclusion
References
APPENDIX
국문요약
SummaryThis study examines how strongly the Asia-Pacific region is interconnected through trade and investment, and analyzes the welfare implications of regional trade and investment liberalization in the APEC process. It is shown in this study that intra-regional trade and FDI in the APEC region actually work to strengthen interdependence among its member economies. In spite of unilateral as well as multilateral liberalization efforts of the APEC member economies, however, there still exist substantial barriers to trade and investment in the region. An empirical analysis of the welfare effects of regional trade liberalization implies that Singapore, Malaysia, Chile and Korea belong to the group that would benefit greatly from liberalization. However, the overall effects of regional trade liberalization are substantially affected by the relative size of scale effects. Meanwhile, it remains uncertain whether regional liberalization in the APEC would bring about convergence of income levels of member economies. -
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Europe-East Asia Economic Relations : Current Status and Prospects
Until the 1980s, Europe-East Asia relations were eclipsed by those between East Asia and North America. However, Europe-East Asia interaction has greatly accelerated in the 1990s. As a result, the volume of trade between the two r..
Baksoo Kim Date 1997.12.30
DownloadContentSummaryUntil the 1980s, Europe-East Asia relations were eclipsed by those between East Asia and North America. However, Europe-East Asia interaction has greatly accelerated in the 1990s. As a result, the volume of trade between the two regions has come to surpass that of Europe and North America. The volume of investment between the two regions has also increased gradually. Against this background, the launching and development of ASEM signifies the beginning of serious efforts to promote closer and cooperative economic relations between Europe and East Asia.
This book is a compilation of the papers and comments from the Seminar on Europe-East Asia Economic Relations held in Seoul on October 30-31, 1997, organized by the Korea Institute for International Economic Policy (KIEP) in collaboration with the Friedrich-Ebert-Stiftung (FES) of Germany. Held right at the onset of the Korean financial crisis, this seminar reviewed Europe-East Asia economic relations in a long term perspective, focusing on opportunities for closer trade and investment between the two regions. -
A Study on China's Petrochemical Industry: Status and Prospects
A Study on China's Petrochemical Industry: Status and Prospects Ihkpyo Hong The petrochemical industry is key in that it has a great effect on other industries and plays an important role in improving industrial structure. In the..
Ihkpyo Hong Date 1997.12.30
Energy industryDownloadContentSummaryA Study on China's Petrochemical Industry: Status and Prospects Ihkpyo Hong The petrochemical industry is key in that it has a great effect on other industries and plays an important role in improving industrial structure. In the 1980s, China's petrochemical industry developed rapidly due to the country's becoming economic growth.
However, despite increased petrochemical complex and production, China's rate of self-sufficiency in petrochemical goods remains only 60%. China's petrochemical market continuously remains in short supply and depends heavily on imports. In addition, China's petrochemical industry faces serious obstacles such as small-sized ethylene factories, an unsettled free market system, disordered circulation of goods, worn-out plants and equipment, and environmental pollution. Therefore China's government plans to actively develop its petrochemical industry through the 'Ninth Five-year Plan' (1996-2000), which entails expanding production, attracting foreign capital, and drawing in advanced technology.
China is currently the largest recipient of exports and investment from Korea's petrochemical enterprises. But the future for these exports and investment into China bodes uncertainty as China's petrochemical industry increases petrochemical complex and production, ASEAN's low-cost petrochemical goods enter the Chinese market, and EU, US, and Japan's petrochemical enterprises expand investment into China. In response, Korea's government and petrochemical enterprises must devise new directions in approaching China. -
Analysis of the First WTO Dispute: United States-Standards for Reformulated and Conventional Gasoline
Analysis of the First WTO Dispute "United States-Standards for Reformulated and Conventional Gasoline" Hosaeng Rhee The Dispute arose from complaints by Venezuela and Brazil regarding the gasoline rule which was implemented by th..
Hosaeng Rhee Date 1997.12.30
Trade disputeDownloadContentSummaryAnalysis of the First WTO Dispute "United States-Standards for Reformulated and Conventional Gasoline" Hosaeng Rhee The Dispute arose from complaints by Venezuela and Brazil regarding the gasoline rule which was implemented by the United States to improve air pollution problem. The Complainants argued that the baseline establishment method included in the gasoline rule violated the most-favored-nation treatment and national treatment obligations, thereby nullifying or impairing the benefits accruing to them under the GATT 1994.
The panel concluded that the baseline establishment method imposed more stringent standard on, and thereby accorded less favorable treatment to, foreign gasoline in favor of domestic gasoline, and such discrimination could not be justified under the Art. XX of the GATT 1994(General Exception Clause).
The United States appealed to the Appellate Body concerning the legal interpretation by the panel of the Art. XX(g) of the GATT 1994. The Appellate Body Pointed out the Panel's errors in the interpretation of the Art. XX(g). However, it concluded that the baseline establishment method was not consistent with the preamble of the Art. XX.
The dispute which was the first one raised according to the WTO DSU, confirmed effectiveness and credibility of the WTO dispute settlement procedure, which would facilitate utilization of the procedure, especially by the developing country Members. On the other hand, although the environmental regulation implemented by the United States turned out to be inconsistent with the GATT 1994, various new interpretations of related Articles widened the scope for the WTO members to implement trade-related environmental measures in the future. It needs to be noted, however, that the Panel and the Appellate Body did not suggest clear and specific criteria for accommodation of environmental measures under the WTO. -
A Study of IMF Bailout Programs: The Cases of Mexico, Thailand and Indonesia
This work reviews the policy experiences of Mexico, Indonesia and Thailand during their financial crises to explore some implications for Korea's economic policy directions. Mexico's case is taken as a successful one given a long ..
Won-Ho Kim et al. Date 1997.12.30
Financial crisisDownloadContentSummaryThis work reviews the policy experiences of Mexico, Indonesia and Thailand during their financial crises to explore some implications for Korea's economic policy directions. Mexico's case is taken as a successful one given a long period of policy dilemmas during the 1980s and the disguised boom in the early 1990s. The other two Asian countries' experiences are also important in that their developments have a parellel impact on Korea's external economic front. The main lesson from the Mexican case is that hesitation in policy reform and priority given to political interests always lead to another cycle of economic crisis. An example of this can be found in 1985, when the Mexican government broke accords with the IMF on an austerity program for pre-election expansion of government spending. Further, the Mexican government's anti-inflationary policy decisions on an overvalued peso since 1987 finally contributed to exacerbating its current account deficit during 1992-94.
The current financial crisis prevailing in East Asia originated from the abrupt devaluation of the Thai Baht in July, 1997. Thailand's financial crisis is commonly attributed to: an ill-managed foreign exchange rate policy; loss of competitiveness in the world market due to the rapid growth of China, Vietnam, and India's economies; and most importantly, a lack of a well-developed supervisory system of the financial sector. The Thai government's current intentions to reform its economy are now well accepted by the international community. Nonetheless, the prospects for the Thai economy are not overly optimistic mainly because of the widespread corruption of its businesses.
Indonesia's current economic crisis can be traced to its expanding current account deficit, growing external debt and problems in its financial sector, particularly its weak banking system. The IMF is placing special emphasis on financial reforms in Indonesia, which, in turn, has ordered the closure of 16 banks, established the Indonesian Bank Restructuring Agency (IBRA), and allowed foreigners to own 100% equity of firms in all sectors. In spite of the IMF program, Indonesia's economic situation has not improved significantly, primarily due to the family-connected Indonesian state's failure to implement the IMF program faithfully. -
A Case Study on the WTO Dispute Settlement Mechanism: Janpan-Taxes on Alcoholic Beverages
A Case Study on the WTO Dispute Settlement Mechanism: Japan - Taxes on Alcoholic Beverages Wook Chae The dispute arose from complaints by the European Community, Canada and the United States with respect to the Japanese Liquor Ta..
Wook Chae Date 1997.12.30
Trade disputeDownloadContentSummaryA Case Study on the WTO Dispute Settlement Mechanism: Japan - Taxes on Alcoholic Beverages Wook Chae The dispute arose from complaints by the European Community, Canada and the United States with respect to the Japanese Liquor Tax Law. The Complainants argued that this Law discriminated against spirits exported to Japan by levying a higher tax on whiskey, cognac and white spirits than on Japanese shochu, thereby nullifying or impairing the benifits accrued to them under GATT 1994.
This case has highlighted four issues based on the Article Ⅲ of GATT 1994 such as definitions of like products and directly competitive or substitutable products, interpretations of 'taxation in excess' and 'similarly taxed' and the meaning of 'so as to afford protection'.
Panel concluded that shochu and vodka are like products and Japan, by taxing the latter in excess of the former, is in violation of its obligation under Article Ⅲ:2, first sentence, of the GATT 1994. It also concluded that shochu and other distilled spirits other than vodka are "directly competitive or substitutable products" and Japan, by not taxing them similarly, is in violation of its obligation under Ariticle Ⅲ:2, second sentence, of the GATT 1994.
While Japan and the United States appealed to the Appellate Body concerning certain legal issues and interpretations, the Appellate Body affirmed most of panel findings and conclusions except for some fundamental issues.
The dispute provides various implications to the on-going case at WTO on Korea's taxation on certain alcholic beverages; that is, it provides good guidelines for developing the relevant logics in the panel process regarding definitions of 'like products' and 'directly competitive or substitutable products', interpretations of 'taxation in excess' and 'not similarly taxed', and the meaning of 'protection of domestic production' and so on.
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