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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. -
The Current Status of the Energy Industry in China and Souggestion for Korea
The Current Status of the Energy Industry in China and Suggestion for Korea Euihyun Choi The Energy industry, as a leading industry, supports economic growth, and makes up a large portion of the national economy. Particularly for..
Eui-Hyun Choi Date 1997.12.30
Energy industryDownloadContentSummaryThe Current Status of the Energy Industry in China and Suggestion for Korea Euihyun Choi The Energy industry, as a leading industry, supports economic growth, and makes up a large portion of the national economy. Particularly for a rapidly growing, developing country like China, the energy industry plays a very important role. In this respect, cooperation in the energy sector between Korea and China should promote mutual economic development.
As a geographically large country, China is endowed with diverse and enormous energy resources. However with a population exceeding 1.2 billion people, China's per capita energy resources are relatively small. As China's economy expanded, so too did its demand for energy. Total energy demand in China in 1993 was the third highest in the world, nearly double its 1978 level. In an effort to underpin its future economic growth, China today is embarking on a major energy development program that will likely present tremendous opportunities to foreign companies in coal mining, electric power generation, oil production, refining and distribution, and supplying the required equipment for constructon.
At present, there already appear to be opportunities galore for foreign firms interested in China's energy industry. With strong economic growth seemingly a given, Chinese government authorities and foreign companies have already negotiated a variety of cooperative deals, and more are in the works.
This report studies the status of the energy industry, related systems, and policies on FDI in China, and based on the reports conclusion, makes suggestions for Korean companies interested in the energy industry in China. -
Background and Prospects for the Indonesian Financial Crisis
Background and Prospects for The Indonesian Financial Crisis Wanjoong Kim Indonesian financial market has rapidly grown in quantity since 1980's. The ratio of total financial institution assets plus securities(TFA) to GDP has ris..
Wan-Joong Kim Date 1997.12.30
Financial crisis, Financial policyDownloadContentSummaryBackground and Prospects for The Indonesian Financial Crisis Wanjoong Kim Indonesian financial market has rapidly grown in quantity since 1980's. The ratio of total financial institution assets plus securities(TFA) to GDP has risen from about 50% of GDP in 1980 to 124% of GDP in 1994. But that market has many structural problems in efficiency and stability. These problems has become major causes of economic crises in 1997.
Indonesia's current economic crisis can be traced to expanding current account deficit, growing external debt and problems in the financial sector, in particular weak banking system. Indonesian banks have been weakened by imprudent lending booms, asset price collapses, increasing bank liabilities with large maturity/ currency mismatches, inadequate preparation for financial liberali- zation and insufficient government management.
Facing economic crisis, Indonesia requested aid from the IMF (International Monetary Fund), which along with the United States, other countries promised a $43 billion credit bailout on the condition of economic reform. The Indonesian government has already announced measures to cut tariffs, reform the financial sector and abolish the monopoly of the National Logistics Agency (Bulog). The IMF is placing special emphasis on financial reform 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, due primarily to the Indonesian government's failure to implement the IMF program faithfuly. The only way for Indonesia to overcome its economic crisis is to show strong will to reform to investors and creditors. In this way, Indonesia could restore confidence in its economy, thereby stabilizing the currency, increasing exports, and allowing Indonesia to repay external debt. -
Current Status and Prospects of CIS Economic integration
Current Status and Prospects of CIS Economic Integration Sung-Kyu Lee, Pyeong-Hee Choi The study is designed to analyze progress, current issues and prospects of CIS economic integration. Particular attention is paid to the impli..
Seong-Kyu Lee et al. Date 1997.12.30
Economic integrationDownloadContentSummaryCurrent Status and Prospects of CIS Economic Integration Sung-Kyu Lee, Pyeong-Hee Choi The study is designed to analyze progress, current issues and prospects of CIS economic integration. Particular attention is paid to the implications of CIS economic integration for Korean firms.
After the collapse of Soviet Union, the 12-former Soviet Republics established the Commonwealth of Independent States (CIS) to revive economic, trade and financial links between them. But the leaders of CIS countries have varied in their commitment and interest in regional economic integration, thus stifling any real progress in multilateral cooperation.
Because of this problem, the former Soviet states are founding new economic blocs within the CIS: the Russia-Belarusian Union, the Quadrilateral Customs Union (Russia, Belarus, Kazakhstan and Kyrgyzstan), the Central Asian Economic Union (Uzbekistan, Kazakhstan and Kyrgyzstan), and GUAM (Georgia, Ukraine, Azerbaijan and Moldova). The recognition that CIS countries need to unite in a more powerful integrated grouping to achieve an upturn in the economy will become more pronounced in the future.
Since the conclusion of the treaty of friendship between Korea and the Soviet Union, Korea has continued to increase investment into the CIS market. However, Korean firms have limited their investment to Russia, Uzbekistan and Kazakhstan. Thus, before the CIS develops into a complete economic union, Korean firms must work out new sales strategies and gradually increase participation in CIS local markets. -
Foreign Investment in Oil & Gas of Central Asia
Foreign Investment in Oil & Gas of Central Asia Cheolwon Lee Central Asia, rich in crude oil and natural gas deposits, possesses vast and untapped development potential. Though the nearby Middle East is better known for sitti..
Cheol-Won Lee Date 1997.12.30
Energy industryDownloadContentSummaryForeign Investment in Oil & Gas of Central Asia Cheolwon Lee Central Asia, rich in crude oil and natural gas deposits, possesses vast and untapped development potential. Though the nearby Middle East is better known for sitting on top of most of the world's natural resources, the Caspian region itself contains richer oil reserves (100 billion barrels) than the recently fought over reserves in Kuwait (97 billion barrels).
In the 19th century, the British and Russian empires clashed in the Great Game, fiercely jousting over control of Central Asia and its riches. Now, at stake is the world's third largest deposit of oil and gas, and the players are the Russians and the Americans. Recent instability in the Middle East has highlighted the need for securing other safe sources of these natural resources. Accordingly, the U.S. government has declared the Caspian region an area of strategic interest and U.S. oil companies have flooded into the local market.
Because Korea depends heavily on oil produced in the Middle East (77 per cent), the health of her economy rests precariously on the region's stability. In order to wean itself from this dependency, Korean firms should actively participate in oil and gas projects in Central Asia. In this context, this study investigates recent activities in Central Asia by Western companies, and based on this, offers suggestions as to how the Korean government and business sector can make meaningful inroads via oil and gas projects. -
The Current Status of the Mekong Basin Development Project and Korea's Strategy
The Current Status of the Mekong Basin Development Project and Korea's Strategy Jaewoan Cheong, Kyoungdoug Kwon The Mekong, is one of the world's longest rivers and runs through six nations China, Myanmar, Laos, Thailand, Cambodi..
Jae-Won Cheong Date 1997.12.30
Economic development, Economic cooperationDownloadContentSummaryThe Current Status of the Mekong Basin Development Project and Korea's Strategy Jaewoan Cheong, Kyoungdoug Kwon The Mekong, is one of the world's longest rivers and runs through six nations China, Myanmar, Laos, Thailand, Cambodia and Vietnam emerging rapidly as "the region of opportunity". This region is rich in natural resources such as hydro power, coal, oil, gas and lumber, and possesses abundant quality human resources.
These six countries that border the Mekong river share similar cultural characteristics. All of them, except Thailand, have accepted capitalistic market economies only recently and now they are propelling rapid, open-door reforms and development policies. In line with these policies, the possibility of joint development has been carefully discussed since the late 1980s.
The Mekong Development Project requires cooperation in several basic setors: traffic, energy, communication, trade and investment. These SOC construction projects, including the TAR (Trans-Asia Railway) Project, make for an extremely attractive market.
From the mid-1990s, Korea has taken a growing interest in the Mekong Development Project. When the Project commenced several years ago, a few Korean enterprises were involved in developing roads and power plants. Also, Korea competed with developed countries like Japan, the U.S. and others in Europe through credits or grants.
It seems that East Asia's recent financial crisis will present serious setback to Mekong Basin Development Project. But, remarkable developmental potential of this area is quite clear, considering that all of the basin nations are growing rapidly with the help of aid from various assistance organizations and foreign capital from foreign companies. Korea needs to actively participate in this project in anticipation of long-term and prosperous partnership with Southeast Asian countries. -
Oil and Gas Transportation System in Russia
Oil and Gas Transportation System in Russia Seungweon Suh Russia hosts the world's largest production of natural gas and third largest production of crude oil. Accordingly, Russia's export of these natural resources plays a decis..
Seung-Weon Suh Date 1997.12.30
Energy industryDownloadContentSummaryOil and Gas Transportation System in Russia Seungweon Suh Russia hosts the world's largest production of natural gas and third largest production of crude oil. Accordingly, Russia's export of these natural resources plays a decisive role in the world energy market. Driven by higher market prices abroad than back home, Russian government and business sector have also taken a keen interest in exporting their oil & gas resources.
However, Russia's oil & gas exports have not expanded according to expectations. This has been due to various transportation related problems, including limited capacity of pipelines and ports, a rapid increase in transportation costs and worn-out infrastructure. Although the Russian government and foreign companies are trying to improve transportation capacity of oil & gas, they have run into snags such as limited funds and conflict of interests.
Korea, highly dependent on foreign natural energy resources, has inherent interest in diversifying its oil & gas import routes. From this viewpoint, Korea needs to secure access to Russia's energy supply in order to satisfy and stabilize demand over the long-run. In this context, this study investigates oil & gas transportation system of Russia, and based on this, offers suggestions as to how the Korean government and business sector can import oil & gas from Russia. -
Implications of APEC Trade Liberalization on the OECD Countries: An empirical Analysis Based on a CGE Model (97.12)
Over the past decade, globalization has been a pervasive trend in almost all economies. The word economy is becoming increasingly interdependent, deepening and intensifying international linkages, most notably in trade. As trade e..
Inkyo Cheong et al. Date 1997.12.30
Economic opening, Trade policyDownloadContentSummaryOver the past decade, globalization has been a pervasive trend in almost all economies. The word economy is becoming increasingly interdependent, deepening and intensifying international linkages, most notably in trade. As trade expands among nations throughout the world, integration of the Organization for Economic Co-operation and Development (OECD) economies with non-OECD economies has become a salient feature of the global economy.
This study identified the possible long-term effect of APEC's trade liberalization commitments on real GDP and trade across regions, both inside and outside the APEC area, and on employment by production sector in each region using a multiregion, multisector, computational general equilibrium (CGE) model.
One of the key finding from our empirical work is the impacts of trade liberalization and facilitation measures in the APEC region have turned out to be significant at least in direction if not in magnitude, throughout OECD as well as non-OECD economies. In particular, because agricultural liberalization and trade facilitation are incorporated in our experiment, the impact stemming from liberalization in these areas turned out to be substantially important.
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