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  • MC13 주요 의제 분석과 협상 대책
    Analysis of Major Agendas at the 13th WTO Ministerial Conference: Korea’s Perspectives

    The WTO’s 13th WTO Ministerial Conference (MC13) will take place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirate. The Ministerial is expected to discuss  follow-up agenda items from the 12th WTO Ministerial Con..

    Euisik Hwang et al. Date 2024.02.20

    economic integration, international trade
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    The WTO’s 13th WTO Ministerial Conference (MC13) will take place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirate. The Ministerial is expected to discuss  follow-up agenda items from the 12th WTO Ministerial Conference (MC12), such as fishery subsidies, the e-commerce moratorium, whether to extend intellectual property rights exemptions to diagnosis and treatment for COVID-19, and WTO reform. In addition, there may also be an attempt to incorporate into the Investment Facilitation for Development (IFD) into WTO law. Additionally, the e-commerce Joint Statement Initiative (JSI) may also attempt to conclude the negotiations at MC13.

    Agriculture and development, traditional issues in WTO multilateral negotiations, are also expected to be discussed at MC13 regardless of whether there is an agreement or not. Finally, issues such as women and trade, climate change, and industrial policy (subsidies), which has recently attracted much international attention, are expected to be discussed at MC13.

    The direction of Korea’s negotiation response in preparation for MC13 can be summarized as follows. First of all, the possibility of reaching a consensus at MC13 must be analyzed first. In other words, since the negotiation period for a ministerial meeting is only 3 to 4 days, it is virtually impossible to reach an agreement through short negotiations unless the agenda is one in which the differences among member countries have been significantly narrowed in advance. Therefore, it is necessary to identify the possibility of reaching agreement on each agenda and to focus negotiating strength on those agendas on which agreement can be reached.

    From this perspective, the fisheries subsidies negotiations and the e-commerce JSI are agendas that have narrowed much of the differences between member countries through previous intensive negotiations. It is expected that most fisheries subsidies that contribute to overcapacity and overfishing (OC/OF) will be prohibited. In addition, Korea is likely to be amongst the 20 largest providers of fisheries subsidies, so it will be subject to additional regulations. However, there is still a big difference in the positions of major countries on special and differential treatments (S&D) for developing countries, including the notification issue of forced labor, so they may not be able to reach an agreement at the MC13. In the case of Korea, it is necessary to deal with negotiations in such a way as to postpone reaching an agreement until MC14 by uniting with other countries and highlighting the problems with the current draft text. In addition, in preparation for the future WTO fisheries subsidy notification, there is a need to closely review domestic fisheries subsidy policies and reclassify fisheries subsidies in line with fishery resource management policies. 

    In the case of the e-commerce JSI, many of the key issues have been resolved due to the United Sates’ withdrawal of its original position. However, there are still issues, such as horizontal issues. In particular, whether or not to extend the moratorium on electronic transmission is a contentious issue that was difficult to reach agreement on at the previous MC12, and as some countries are still strongly opposed to extending the moratorium, it is expected that MC13 will also face considerable difficulties. Korea needs to engage to MC13 in a way that contributes to reaching an agreement on the e-commerce JSI. However, it is necessary to pay attention to the give-and-take compromise among major countries on whether to extend the moratorium in the final stage of MC13.

    As with other agendas, the positions of Member countries are sharply conflicting, so it is difficult to expect any particular outcomes from the MC13. The question of whether or not to extend the scope of intellectual property exemptions to COVID-19 diagnostics and treatments is important to substantially improve access to COVID-19 diagnostics and treatments in developing countries (including least developed countries). Therefore, it is necessary to temporarily support the expansion of the scope of the exemption, but make it subject to monitoring and evaluation by relevant international organizations to analyze its effectiveness.

    We have important interests at stake in WTO reform, so it is important to actively participate, but to accurately recognize our limitations by taking into account the characteristics of multilateral negotiations. In particular, the will of the United States has an absolute influence on the reform of the dispute settlement system (DSS). Therefore, it is necessary to handle negotiations in such a way that properly reflects the US interest based on the principle of a two-tired dispute settlement system with an appellate function. In particular, it is possible to propose a plan to use periodic review by the DSB(Dispute Settlement Body) or review by panel judges to keep appellate judges in check. Meanwhile, Alternative Dispute Resolution (ADR) such as good offices, arbitration, and mediation should be allowed for efficiency. However, considering the possibility of a favorable outcome for a powerful country, the possibility of going to lawsuit (panel, etc.) should be left open.

    Agriculture is a sharp conflict of interests among Member countries, so MC13 should focus on the specific content of the future work plan rather than the derivation of outcomes. In particular, the direction of future discussions on domestic subsidy reduction needs to focus on developing a work plan that meets our interests. As the conflict between developed and developing countries continues, it is unlikely that any results in development agenda will be achieved in MC13. In the case of Korea, it is necessar to be proactive in granting flexibility to the least developed countries (LDCs). To achieve this, it will be necessary to propose a plan to change the extension of benefits upon graduation from LDCs to a mandatory provision rather than a best-efforts clause.

    Regrading policy space, it is important to determine our position on the industrial subsidy of major countries. Korea ay provide subsidies to develop its own high-tech industries. Therefore, some flexibility is needed in the application of WTO subsidy provisions.  However, rather than Korea's utilization, unfair competition due to the astronomical scale of subsidies provided by major countries (including developed countries as well as China and India) may be a bigger problem for Korea. Therefore, it is necessary to deal with industrial subsidies based on the principle of effective regulation rather than permission, but in the direction of providing an appropriate level of flexibility for each situation. To this end, an institutional mechanism needs to be established within the WTO that can focus on discussing and recommending relevant subsidy policies of Member countries.
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  • 러시아-우크라이나 전쟁이 EU의 '개방형 전략적 자율성' 확대에 미친 영향: 에..
    Impact of Russia-Ukraine War on the Extension of EU's 'Open Strategic Autonomy': Towards Energy Trasition, Refugee Influx and Security Integration

    This report examines how EU’s ‘open strategic autonomy’ has been developed and realized facing recent changes in the global trade landscape, especially in areas such as supply chain, energy transition, immigration, and se..

    Youngook Jang et al. Date 2023.12.30

    economic cooperation, industrial policy
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    This report examines how EU’s ‘open strategic autonomy’ has been developed and realized facing recent changes in the global trade landscape, especially in areas such as supply chain, energy transition, immigration, and security integration. In response to the fragmentation and blocization of the global economy, which manifested in the US-China strategic competition, the COVID-19 pandemic, and the Russia-Ukraine war, the EU has sought to strengthen the competitiveness of its own high-tech and strategic industries and reduce its dependence on foreign countries (strategic autonomy). At the same time, it seeks to continue cooperation with like-minded countries with shared values and interests to address challenges that require global effort (openness).


     Chapter 2 defines open strategic autonomy in more detail and investigates how it has been implemented in the supply chain sector. The industrial and trade policies that have been published since the inauguration of the current EU Presidency in 2019 embody the concept of open strategic autonomy, which is defined as “strengthening competitiveness Executive Summary in the region to defend EU interests without relying on other countries, while continuing to cooperate with partners who share the values and interests.” After the Russia-Ukraine War, the EU continued its efforts to identify areas of weakness in the EU’s competitiveness and to localize and diversify its supply chains. This strategic shift was reflected in a series of supply chain legislation such as the European Chips Act, Critical Raw Materials Act, Net-Zero Industrial Act, and Corporate Sustainability Due Diligence Directive. The EU sets targets for the share of home-produced goods and provides various support measures such as subsidies, tax benefits, R&D investment, and workforce training. In addition, the legislation emphasizes bilateral and multilateral strategic partnerships, reflecting the open strategic autonomy of the region to continue cooperation with like-minded countries.


    Chapter 3 investigates energy policies of the EU and EU Member States. The energy crisis brought on by the Russia-Ukraine war illustrated how overdependence on a single country can have a profound impact on the EU economy. In response to the energy crisis, the EU sought to phase out or suspend energy imports from Russia, diversify its energy import sources, increase the production of renewable energy, and promote energy efficiency. The energy policies of Germany, France, Finland, and Poland are then examined as case studies. Germany’s recent energy policy has been characterized by an increased use of renewable energy sources, the closure of all nuclear power plants, and an increase in hydropower generation. France, on the other hand, has maintained a high reliance on nuclear power, while persistently investing in renewable energy to achieve climate neutrality by 2050. Finland is a low-carbon country with a high share of renewable energy, and has been importing energy from neighboring countries such as Norway and Estonia after the outbreak of the Russia-Ukraine war. Poland is the most fossil fuel-dependent country in the EU, and as such, it is expected to face the Executive Summary • 259 most difficulties in implementing EU-wide green transition policies. Therefore, Poland aims to overcome this limitation by starting a nuclear power project. It is common to all four countries that they are trying to expand renewable energy while developing alternative energy sources such as nuclear and hydrogen power. Increasing energy independence through the development of alternative energy sources is expected to increase the EU’s strategic autonomy in the energy sector.


     Chapter 4 analyzes the trend of Ukrainian refugee influx to European countries and their impact on the labor markets, through literature review, fieldwork and statistical analysis. Immediately after the outbreak of the Russia-Ukraine war, there was a large influx of Ukrainian refugees to European countries, and EU member states actively accepted refugees by invoking the Temporary Protection Directive. The refugee influx to Europe is characterized by a high proportion of women and children and a high number of highly educated and skilled workers. The empirical analysis in this chapter, using microdata from UNHCR, shows that access to language training is significantly and positively associated with a refugee’s probability of employment. While the impact of refugee flows on the labor markets of host countries still needs further studies, an increase in the labor force with no significant impact on labor market conditions is observed so far. While Europe has been welcoming Ukrainian refugees, it showed a very different attitude towards migrants and refugees from the Middle East and North Africa, including Syria. This could be explained by an attempt to overcome the security threats posed by the war through solidarity with Ukraine, a country with a similar position. This illustrates one aspect of the EU’s tendency to selectively accept migrants and refugees to defend its interests and provides evidence that the EU’s commitment to open strategic autonomy is also observed in the area of immigrant acceptance.


    Chapter 5 focuses on the changing concept of strategic autonomy in the EU’s security sector after the war. While the need to strengthen the EU’s defense capabilities in response to the immediate security threats of war has intensified, Europe’s strategic autonomy has remained an elusive goal, even as its security dependence on the United States has increased dramatically. The accession of traditionally neutral countries such as Sweden and Finland to the US-led NATO alliance signals a growing preference for increased US-dependent defense capabilities. However, the EU has pursued a strategy of strengthening its own security and defense capabilities independent of NATO. The provision of arms and munitions to Ukraine and the implementation of training missions to Ukraine’s armed forces are examples of such moves. The EU’s efforts to establish a common market for defence procurement have also been partially realized with the passage of the European Defence Industry Reinforcement through Common Procurement Act. The EU’s strategic autonomy in the security field will be determined by its progress in establishing relations with the United States and NATO, building a regional defence industry ecosystem, supporting Ukraine’s post-war defence build-up, and security cooperation with Indo-Pacific countries.


    Chapter 6 presents policy implications for Korea based on the above findings. The EU’s expanding support for local industrial competitiveness is likely to pose challenges for Korean exporters, but there are also opportunities for Korea to take advantage of this. European Chips Act, Critical Raw Materials Act, Net-Zero Industrial Act are all concerned about expanding bilateral and multilateral cooperation with trusted partners. In addition, the EU’s recent supply chain legislation is characterized by weak geographical discrimination, so it is expected that Korean companies with a local presence will be able to enjoy similar benefits as EU companies. Taking advantage of the EU’s favorable aspects of its foreign and economic policies will not only benefit our companies, Executive Summary • 261 but will also allow us to make a joint contribution to addressing global challenges that require international cooperation, such as the reshaping of the international order, supply chain pressures, climate change response, and labor supply shortages. To this end, Chapter 6 identifies areas where we can expand our cooperation with the EU in the energy, immigration and security sectors. Finally, the challenges of the changing global trading environment faced by the EU are the same challenges faced by Korea, and we need to learn from the EU’s responses and use them to develop strategies tailored to our own circumstances. While it is beyond the scope of this report to formulate a specific foreign economic and economic security strategy for Korea, the EU case analyzed in this report is expected to serve as an important reference point.

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  • 디지털금융을 통한 아프리카 금융포용성 개선 방안 연구
    Digital Finance and Financial Inclusion in Africa

    This study provides a comprehensive analysis of the digital finance and its impacts on financial inclusion in Africa. While the development of the financial sector is crucial for long-term economic growth, traditional financial in..

    Seoni Han et al. Date 2023.12.30

    customs, financial policy
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    This study provides a comprehensive analysis of the digital finance and its impacts on financial inclusion in Africa. While the development of the financial sector is crucial for long-term economic growth, traditional financial industry growth in Africa has been insufficient. Nevertheless, notable progress has been made in enhancing financial inclusion in alignment with Sustainable Development Goal 8, particularly since the introduction of mobile money services in Kenya in 2007. Mobile money services have emerged as a lifeline, allowing the previously unbanked to have access to affordable and secure financial services in Africa. The adoption of mobile-based financial services has rapidly expanded, with 154 out of 315 global mobile money services available in sub-Saharan Africa as of 2022. This widespread adoption has significantly reduced the proportion of financially excluded populations across Africa. However, despite these achievements, the adult account ownership rate in sub-Saharan Africa averaged only 55% in 2021. With the exception of South Africa, which has a well-established traditional financial industry, and Kenya, which has made remarkable progress in embracing mobile money, there is still ample room for improving financial inclusion throughout the African continent.

    The COVID-19 pandemic accelerated the shift in the financial industry, with a surge in online payments and increased fintech activities. Lockdowns led to higher demand for contactless services, while African governments’ policies to boost non-face-to-face financial services further stimulated the use of mobile money services. Many African countries are now pursuing digital transformation strategies tailored to their needs, focusing on e-government services, digital infrastructure, and electronic payment systems. Additionally, many African countries are formulating national strategies to enhance financial inclusion by integrating low-income and marginalized populations into the financial sector. 

    African countries have different strategic approaches to financial sector development, and financial inclusion. Some markets are dominated by mobile money, often led by telecom companies, while others are led by traditional financial institutions. South Africa, with a well-established traditional financial sector, is recently expanding digital finance to enhance financial accessibility, especially in rural areas and for small businesses. The government develops financial inclusion policies, supports fintech and creates innovative financial service regulations. In Kenya, the rapid growth of mobile money services, driven by a robust mobile infrastructure, has played a pivotal role in advancing financial inclusion. The government’s tailored strategy centered on mobile money has positioned Kenya as a digital leader in Africa. A series of the government’s strategies for digital transformation underscores Kenya’s commitment to digital financial development and transitioning to a digital economy. Senegal still faces financial inclusion challenges with the account ownership rate of 56%. The government’s response includes the Financial Inclusion Strategy 2022-2026, which prioritizes developing digital financial products, enhancing digital infrastructure, improving regulation, and boosting institutional efficiency for consumer protection. Senegal’s National Digital Strategy aims to create an open and affordable digital network for digital transactions and broaden access to digital services. 

    The widespread adoption of mobile money in Africa significantly enhances financial accessibility for people from all backgrounds. Affordable and user-friendly mobile financial services play a vital role in improving the financial stability and risk-sharing capabilities of low-income households and small businesses, ultimately enhancing their resilience to external economic shocks. Studies find that the penetration of mobile money in Kenya facilitated financial management for low-income groups, and increased women’s labor market participation, and reduced the proportion of people living under the poverty line. Moreover, the empirical analysis using the Enterprise Survey of Kenya shows that enterprises have also experienced the beneficial effects of mobile money as it facilitates financial decision-making, which in turn fuels greater investment activities aimed at enhancing productivity and achieving innovation within their business operations.

    A well-functioning financial system is essential for fostering economic growth. The international community actively supports Africa’s financial development efforts through various means, including concessional and non-concessional official development assistance. Notably, nine of the top ten donor countries to African financial sectors are in European Union, underlining their dedication to aiding the financial growth of Africa. The United States, through its USAID INVEST platform, provides regulatory and technical assistance to promote private sector investments in Africa. Japan is also significantly increasing its investments and collaboration in Africa’s financial sector, with plans to establish the‘Facility for Accelerating Financial Inclusion’to further support financial inclusion initiatives.

    Africa is undergoing a rapid digital transformation, with a significant uptick in investments in tech startups. The African fintech industry is steadily increasing, with expectations that its size of investments will grow approximately 13 times by 2030 compared to 2021. Notably, more than half of the total foreign direct investments towards Africa are channeled into the fintech sector. A noteworthy trend is the increased participation of African businesses alongside the surge in foreign investments. With the expansion of e-commerce, digital trade, and e-government services, the African digital payment market is projected to grow fast, and the implementation of the African Continental Free Trade Area(AfCFTA) is expected to further boost pan-African digital payment services.
     
    Based on the findings of this study, the followings are suggested for how Korea can advance its cooperation with Africa in the digital finance and financial sector in general. Firstly, Korea can actively engage in international initiatives to mitigate financial vulnerabilities and enhance financial inclusion to promote inclusive and sustainable economic growth in Africa. Leveraging its experience in enhancing financial infrastructure during its own economic development, Korea can provide advisory service and technical assistance to support financial sector development in Africa using resources from its official development assistance or in collaboration with international organizations with expertise in financial sector. 

    Secondly, the Korean government should support Korean companies with regulatory and diplomatic measures to facilitate their venturing into African markets. As the success of Korean companies in emerging markets requires securing stable financing and implementing risk mitigation measures, it is important for Korean financial institutions to accompany them in the local market. Currently, Korean financial institutions displays increased interests in the African market, as evidenced by the recent cases where Korean banks indirectly investing in the African market through collaboration with regional financial institutions. Korean fintech companies, with their expertise in technology and management, can focus on the countries at the like Senegal that still has demands for improvement of digital payments. Particularly, there are opportunities to integrate digital finance solutions with e-government system. The Korean government can establish a development financial institution(DFI) to facilitate Korean investors’ activities and to promote private sector engagement and development by harnessing development cooperation resources. Additionally, the government should devise reion-specific economic strategies and engage in diplomatic efforts to foster favorable and cooperative attitutes towards Korean companies from African countries. 

    Thirdly, building digital infrastructure and developing skilled workforce is important to bolster Africa’s digital competitiveness. As the digital infrastructure sector in Africa is largely dominated by European and Chinese companies, it would be practical for Korean companies to make partnerships with such foreign or local entities. To address the shortage of ICT professionals hindering the growth of the digital industry in Africa, Korea can expand its contribution in capacity building by offering ICT education and training programs in partnership with international organizations or local specialized institutions in a wider range of African countries. Additionally, Korea can support Africa’s efforts to enhance digital literacy in rural areas and marginalized communities.

    Lastly, Africa’s journey towards digital transformation should be designed in the perspective of its efforts for regional integration. Africa’s digital transformation aligns with the African Union’s Agenda 2063 and the African Continental Free Trade Area(AfCFTA) agreement. The African Union aims to establish a single digital market through AfCFTA with an emphasis on digital trade and digital financial inclusion. This endeavor presents opportunities for improvement of customs and trade administration. Korea can offer a mutually beneficial partnership for Africa in its efforts to link digital finance to an integrated trade system. 
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  • 아세안 주요국의 난민지원정책과 한국에 대한 시사점
    Refugee Protection Practices in 5 ASEAN Countries and Their Implications for South Korea

    Recently, we have witnessed global refugee crises caused not only by armed conflicts and wars but also by climate change. The situation is as serious as they were when the international community adopted the 1951 Convention Relati..

    Je Seong Jeon et al. Date 2023.12.30

    ODA, economic cooperation
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    Recently, we have witnessed global refugee crises caused not only by armed conflicts and wars but also by climate change. The situation is as serious as they were when the international community adopted the 1951 Convention Relating to the Status of Refugees (hereafter the 1951 Convention), requiring international cooperation and collaboration more than ever. However, the international responses have not been enough, even retrograde, to address the crises. For instance, refugee hosting countries, like Australia and the USA, used to provide resettlement opportunities for refugees over the long histories of immigrants, complying with the 1951 Refugees Convention. But now, even those countries are trying to evade refugee protection responsibilities. The indefinite delay of resettlement to the host countries, mainly in the global north, has led to a ‘protracted refugee situation’ in the accommodating countries in Southeast Asia, which reveals the limitation of the international refugee regime based on the 1951 Refugee Convention and the 1967 Protocol Relating to the Status of Refugees (hereafter the 1967 Protocol).

    The refugee issues demand international collaboration because it is related to people crossing the borders. That is why the international community realized the necessity to regulate the issue and formulated the international refugee laws, including the 1951 Refugees Convention and the 1967 Protocol, to share the responsibilities. Korea also has taken part in these efforts by ratifying the 1951 Convention and the 1967 Protocol in 1991 and legislating the Refugee Law in 2013 for the first time in Asia. In addition, the country has implemented a pilot program to resettle around 30 refugees yearly since 2015. However, there are many challenges to complying with international regulations and fulfilling responsibilities to protect refugees, as we noticed from the case of Yemen refugees claiming asylum in Jeju Island in 2018. Also, Korea has often been criticized for evading its fair share of refugee protection responsibilities due to its low refugee recognition rate, which is 2.8%.

    This study aims to suggest some implications for refugee policies to help the Korean government carry out its obligations as a sound member of the international community. In this regard, some ASEAN countries may provide good reference points with their decades-long experiences coping with refugee issues. 

    Southeast Asia is a region both to be the origins of refugees and to provide accommodating space for them over the years. This two-sided situation has been developed due to the ‘open regional system’ based on its geographical and environmental aspects. The countries in Southeast Asia have been the origins of refugees in their histories. Their histories have evolved by combining the external pressure and internal dynamics from the traditional state-building process and colonization by the Western powers to independence movements. All these events have frequently led to wars and conflicts with their neighbors and/or within the countries. At the same time, Southeast Asian countries have provided shelters for refugees flowing in from the neighboring countries.

    In fact, from when we had no clear distinction between victims of disaster, displaced people and refugees, peoples in Southeast Asia have crossed the borders with much fewer restrictions. Although the modern state-nations have developed more strict distinctions based on peoples' origins and the borderlines, Southeast Asian countries have tolerated those moving into their territories and allowed their, though unofficial, integration. These Southeast Asian histories and experiences seem different from those assumed by the international refugee regime based on the 1951 Convention and the 1967 Protocol. Thus, we may need different perspectives to understand them. This study aims to highlight the lessons learned from some ASEAN countries' experiences, explore the implications of improving the Korean refugee policies, and search for the themes and methods of future collaborations with these countries.

    We select the countries for our study with a criterion: whether to ratify the international refugee laws. The first group includes those ratifying the 1951 Convention and the 1967 Protocol, which means they are expected to have institutional protection for refugees, complying with international standards to some extent. These countries could be used as reference points for Korea under similar conditions. The second group consists of the countries without ratifying either but allowing the refugee influx for decades. They provide ‘partial’ or ‘unofficial’ protection for refugees because they do not recognize the refugee status but permit the United Nations High Commissioner for Refugees (UNHCR), International Organization for Migration (IOM), and other local/ international NGOs to help refugees. We select five ASEAN countries, the Philippines, Cambodia, Malaysia, Thailand, and Indonesia, and put the first two countries into the ratifying group and the other three into the non-ratifying group.

    We use a comparative methodology, ‘contrast of contexts,’ to extract the implications of the refugee protection practices in the five countries with three variables, institution, geo-environment, and socio-political environment, reflecting the characteristics of the five selected countries. First, with the institution variable, we determine whether ratification of the 1951 Convention and the 1967 Protocol would provide any actual protection to refugees. Second, we use the geo-environmental variable dividing Southeast Asia into two, mainland (Thailand and Cambodia) and maritime (Malaysia, Indonesia, and Philippines), to understand the influence of the geographical location and environmental factors on the refugee issues. This variable helps explain the ways of the refugee inflow and outflow and the size and composition of the incoming refugees. The last variable, the socio-political factor, is selected to explore the relationship between the levels of democracy and refugee protection. We categorize Thailand and Cambodia as electoral authoritarianism and Indonesia, Malaysia, and the Philippines as electoral democracies. We also analyze what aspects of the political system may create differences in refugee protection practices. The political variable may affect the variety of actors, the autonomy of civil society, refugees' preferences, and local integration.

    The existing literature on Southeast Asian refugee issues mainly focuses on ratifying the 1951 Convention and the 1967 Protocol and criticizes the institutional weaknesses of refugee protection. 
    Specifically, most studies are inclined to denounce the accommodating countries to control the refugee inflow with the immigration law, to regard their policies as defensive, and to depreciate the outcomes of the refugee-relevant practices in these countries. While the existing studies narrowly focus on the institutional protection the central governments provide, they ignore positive outcomes and achievements made by other actors, including local governments, international organizations, civil society, and refugee-led organizations. Our study wants to fill the gap by exploring the practices of refugee protection carried out by various actors, both governmental and non-governmental, by overcoming the weaknesses of regulations and policies through interaction.

    Chapter 3 presents the essence of our study, investigating the refugee situations in the five countries and analyzing the refugee protection practices of different actors and their implications. 
    Thailand's geographical location has made the country most susceptible to refugee crises caused by the events in the neighboring countries. Especially during the Indochina War, the country formed a primary policy direction in responding to the refugee crises, summarized as ‘humane deterrence,’ which Thailand has maintained until now. In 1979, when the country had the refugee influx from Cambodia, the Thai government enacted an immigration law, defining anybody entering the country without the government's permission as ‘an illegal immigrant.’ It has become the basic approach of the Thai government to apply not only to refugees from the Indochina War but also to any refugees arriving later, including massive inflow from Myanmar. However, in reality, the Thai government has accommodated around 100,000 Myanmar refugees in 9 refugee camps scattered along the Thai-Myanmar border and provided shelter by conniving the countless Myanmar people without refugee status to live as undocumented immigrants in the Thai territory. Even though the country did not ratify the 1951 Convention, she has the constitution and other domestic laws to be used for refugee protection while ratifying several international human rights laws to provide legal space for complementary protection. In addition, the country has allowed unofficial protection to be provided by international organizations, including UNHCR and refugee-supporting NGOs. In response to the prolonged Myanmar refugee situation, the Thai government formed the Provincial Admission Boards in the provincial governments to support the registration of qualified refugees for the third country resettlement program implemented by UNHCR, the USA and other Western countries in the mid-2000s. Also, the Thai government has provided medical services and education through various non-governmental actors' activities, including Mae Tao Clinic. In summary, while Thailand has insufficient institutional protection at the national level, the country has provided various complementary protection.

    Malaysia has hosted the most enormous number of refugees in Southeast Asia. In 2022, the country was recorded to host 134,554 refugees from various origins, including those out of Southeast Asia and neighboring countries such as Myanmar, from which refugees passed through Thailand. The Andaman Sea Crisis of Rohingya in 2015 became a turning point in Malaysian refugee policies. Since then, the Malay government has allowed Southeast Asian refugees to stay temporarily in its territory until durable solutions for refugees are made. Recently, the refugee influx due to the military coup in Myanmar has increased the work burden of UNHCR, which has been the leading actor in determining the refugee status and protecting them, resulting in the deteriorating situation of refugees. Similar to Thailand, Malaysia has an immigration law to control refugees, thus leaving refugees without any legal status and making refugees vulnerable to arbitrary detention and deportation as illegal aliens.

    When a country does not ratify the Refugee Convention, we may appeal to international human rights laws for complementary refugee protection. However, Malaysia ratified only three core international human rights laws: the Convention on the Rights of the Child, the Convention on the Elimination of All Forms of Discrimination Against Women, and the Convention on the Rights of Persons with Disabilities. Even worse, the country made several reservations for each Convention, resulting in watering down the laws. Nonetheless, it is crucial to recognize that the country has allowed various international organizations, national agencies and civil society to promote the refugees' rights in alternative ways. In addition, recently, the Malay Prime Minister has taken more positive steps related to the refugee issues, such as using the term ‘refugees’ to refer to those who would be called ‘illegal aliens’ and urging cooperation and collaboration of Southeast Asian countries over the issues.

    Moreover, there was a significant legal case in February 2023 about refugees' worker rights. A refugee worker brought a case of unfair dismissal and wage delay to the Industrial Court of Malaysia and received a favorable verdict. The victory was regarded as an official recognition of the rights of refugees as workers for the first time. The case was a part of the legal progress and achievements for refugees and other social issues, such as the death penalty and women's and minorities' rights, through legislation and court cases during the first half of 2023. The Malaysian experiences suggest an important lesson that enhancing democracy in a society may be as crucial as the international refugee regime in order to improve refugee protection.

    Indonesia also did not ratify the refugee convention or the refugee law. The country has used the immigration law to deal with refugee issues. These facts may attribute the country seemingly to having very weak refugee institutions. However, contrary to the strict official position, the government has implemented refugee policies based on tolerance and co-existence. Mainly, the government has provided partial or informal protection by collaborating with international and local organizations working for refugees. These groups include UNHCR Indonesia, IOM, Jesuit Refugee Service Indonesia, SUAKA, Human Rights Working Group, and Amnesty Indonesia.

    In addition, Indonesia ratified several international human rights laws, which can be used to advocate complementary protection for refugees. Also, in 2009, the country contributed to forming the ASEAN Intergovernmental Commission on Human Rights (AICHR) and became the only country to appoint a human rights activist as its representative. AICHR is a body that copes with human rights issues that ASEAN may not officially cover. Thurs, it can work on refugee issues.

    Historically, the Philippines has accepted refugees from various origins both in and out of Southeast Asia. The refugee history could date back to 1910 when White Russians escaping from Russia flowed into the country after World War I. Since then, the country has opened its door to refugees around the world nine times more and ratified the Convention and the Protocol in 1981, earlier than many other countries. Also, the country accommodated around 300,000 refugees from Vietnam, Cambodia, and Laos during the Indochina refugee crisis.

    Also, the country installed the refugee status determination system in 1988 for the first time among ASEAN countries. The Refugees and Stateless Persons Protection Unit under the Ministry of Justice introduced the procedures to determine the status of stateless persons in 2012, which are closely related to refugee status determination. Furthermore, the government enacted ‘the Rule on Facilitated Naturalization of Refugees and Stateless Persons’ in March 2022, the first case in the world for the judicature to lead the simplification of the naturalization procedures of stateless persons.

    In addition, some of its cities have participated in the UNHCR campaign of Cities #WithRefugees since 2019. This is one of the examples of local governments taking part in the international initiative for refugee protection. In the campaign, 13 Philippines cities have signed the statement of solidarity together with more than 250 cities worldwide, pledging to support refugees and promote inclusion. In August 2023, the Philippines continued to respect international standards, including joining the ‘New Transit Agreement.’ However, despite its efforts, the number of refugees in the Philippines was only 856 in 2022. It may mean that the institutionalization of refugee protection may not be enough to protect refugees.

    Once Cambodia was one of the origins of mass refugee outflow during the Indochina refugee crisis, the country ratified the Refugee Convention in 1992 following the Philippines, and all nine core international human rights laws closely related to refugee protection. In this regard, the country could be compared to the Philippines. However, the number of refugees staying in the country was only 24 persons in 2022, the majority of whom were Montagnard, the indigenous people from Vietnam Highlands escaping during the Vietnam War. In addition, even after the new government was set up through the 1993 election, the country has struggled with its domestic issues, including massive Internal Displaced Persons (IDPs) resulting from internal political turbulence.

    Cambodia has a sound legal foundation for refugee protection both in general and in detail, with the constitution guaranteeing universal human rights and respect for international laws and with the 2009 enactment of a decree about the refugee status determination (RSD) procedure. However, especially the 2009 decree resulted in some negative outcomes. One of the most significant changes made by the decree was transferring the task of determining refugee status, which used to be done by UNHCR, to the Cambodian government. This change caused several problems. For instance, the RSD procedures have been considerably delayed, but there was no government support. This situation has increased the economic and psychological burdens of asylum seekers. Even worse, the Cambodian government has been criticized for using refugees for the country's economic gains. One such case was receiving tremendous aid from China after deporting Uighur asylum seekers to China in 2009. Another case was that the Cambodian government accepted 55 million Australian Dollars in return for signing an agreement about resetting Nauru refugees in Cambodia who initially tried to seek protection in Australia in 2014. To make matters worse, the country has no non-governmental actors except Jesuit Refugee Service Cambodia.

    The comparative analysis of refugee protection practices in the five ASEAN countries reveals that the three factors proposed in the research methods were valid. In particular, geographical factor such as geographical proximity is directly correlated with the high level of refugee admission in Thailand, Malaysia, and Indonesia. Besides, the socio-cultural characteristics of mainland or island Southeast Asia also have varying effects on different countries. For example, the official religion of Malaysia, Islam, which is considered a characteristic of island Southeast Asia, plays as a pulling factor in drawing Muslim refugees into the country, including the Rohingya people from Myanmar.

    It was also found that the economic condition of host countries is a significant factor. This claim is supported by the massive flow of refugees heading to Malaysia and Thailand, the two largest labor-importing countries in the region. Conversely, the economic factor also explains why the Philippines and Cambodia host a minimal number of refugees, although they are the signatories to the refugee treaties to some extent. Refugees tend not to consider the two countries as their final destination since the states provide minimal opportunities for refugee employment.

    Economic factor provides valuable insights for understanding the prolonged refugee crisis in Southeast Asia. Given the significant delay and uncertainty of resettlement to the third country, refugees are more likely to move to host countries with relatively stable livelihoods. Refugees would prefer host countries that tolerate their presence to some extent over countries where employment opportunities are scarce- although the tolerance is entirely driven by the state's economic necessity. This finding seems to be valid in the cases of the five ASEAN countries analyzed in this study. Importantly, however, from the perspective of refugees risking their lives to escape their home countries, it is likely that their ultimate goal is not just to save their lives. Refugees are looking for places where they can not only economically survive but also live with the fundamental rights and dignity they are entitled to as human beings. This understanding draws our attention to the relationship between refugee protection and democracy. Comparing the level of democracy in the five ASEAN countries supports this assumption.

    This study devised a comparative framework to distinguish between Thailand and Cambodia as the countries with an electoral authoritarian regime and Malaysia, Indonesia, and the Philippines as the countries with an electoral democracy. This analytic frame was based on the idea that all the countries under study have electoral systems. However, in cases where authoritarian rule is strong, the effectiveness of these systems may be limited. However, this framework does not adequately explain the large-scale refugee movement towards Thailand. In this study, therefore, the role of democracy in refugee protection in each state was examined not only based on electoral systems but also by using various components of democracy. The analysis of democracy and freedom in the selected countries shows a significant relationship between the level of democracy of host countries and their refugee protection. The democracy factor was particularly useful in explaining the poor refugee protection in Cambodia, which has the lowest democracy index among the five countries assessed in this study. Protecting refugees is critically challenging in a country where political activities to hold ruling parties accountable are suppressed, and civil society advocating for the rights of minorities is absent, even if they all have the electoral system.

    Although countries like Thailand, Malaysia, Indonesia, and the Philippines are often categorized as “flawed democracies,” their civil societies are active in refugee protection, and refugees living in those countries are also actively engaged in seeking their rights instead of remaining passive recipients of protection. Considering those cases, it is likely that the level of states' refugee protection improves with the level of democracy of the host country.

    Building upon the comparative analysis of refugee protection practices in the five ASEAN countries, the following section explores some implications both for the Korean government and civil society in three aspects: for the refugee policies; for foreign policies; and for international solidarity of civil society.  

    1) Implications for the South Korean government's refugee policies
    The cases of the five ASEAN countries highlight the importance of establishing and strengthening collaboration between central governments and local authorities for refugee protection. In the case of Thailand, while it does not have a national-level refugee status determination process, it has created ‘local reception committees’ instead and allows local governments to assess the eligibility of refugees and grant them refugee status. Similarly, the Philippines published a Memorandum Circular on Local Government Assistance for Persons of Concern (POCs)' to strengthen local government's responsibilities and autonomy in refugee protection. The example of UNHCR's campaign, #WithRefugees, which involves 13 local cities in the Philippines, demonstrates that a country can provide meaningful support for refugees when local cities and communities voluntarily and actively engage in refugee protection. Ensuring autonomy for local governments in designing and implementing refugee policies is an important first step. However, it is also worth learning a lesson from Indonesia's failure. The case suggests that simply passing the responsibility to the local government without providing adequate funds and guidelines can burden local communities and lead to failure in refugee protection. Therefore, granting autonomy to local governments while simultaneously developing guidelines to enhance awareness and mutual respect for refugees, as well as providing appropriate incentives to the host communities, can be a way to address these challenges effectively. This approach strikes a balance between the central and local governments needed for an effective response to refugee protection.

    Furthermore, as 2024 marks the 10th year of South Korea's resettlement pilot program, it is necessary to expand this initiative and make it a permanent policy. The country should consider enhancing its resettlement and complementary pathways, starting with refugees who have a sound understanding of Korean society and present a high willingness to resettle in the country. Since 2015, the South Korean government has resettled approximately 30 refugees annually through the resettlement pilot program. From 2015 to 2017, this program focused on resettling Myanmar refugees who were residing in refugee camps in Mae Sot, Thailand, and from 2018 onwards, it included refugees living in urban areas in Malaysia. South Korea's decision to resettle urban refugees in Malaysia is based on the assumption that urban refugees making a living in the service sector may be in a situation similar to that of the Korean labor market. Indeed, urban refugees from Malaysia have demonstrated high economic self-sufficiency. These cases highlight the importance of understanding the environments familiar to refugees in making resettlement programs. While the pilot program has been successful to some extent, it has only accommodated a small number of refugees. The government should consider expanding the program. 

    In recent years, accepting refugees through complementary pathways has gained significant attention as an alternative solution to the limited number of resettlement opportunities. Very recently, South Korea also has tried it by bringing qualified refugee students for education. In addition, the Ministry of Justice has implemented a complementary pathway program to connect qualified refugee workers to job placement. However, similar to the resettlement program, only a few refugees have enjoyed these programs' benefits so far. In addition, the job replacement program has provided limited types of jobs, restricting refugees with skills and high education from utilizing their full capacities. It would be helpful not to treat refugees as a homogeneous group but to assess their diverse backgrounds and experiences and provide job opportunities accordingly. This more personalized and flexible approach also can help complement the limitations of current migrant labor employment policies as well. 

    2) Implications for diplomacy and international development cooperation
    The Korea-ASEAN Solidarity Initiative (KASI) is a foreign policy initiative focusing on Southeast Asia as one of the Indo-Pacific Strategies made by the new government of South Korea. Unlike the previous administration's New Southern Policy, the KASI is characterized by its emphasis on values and non-traditional security. The “values diplomacy” stresses the values of freedom and human rights, which can be extended to encompass various issues, including refugee issues. The emphasis on non-traditional security can be a basis for a comprehensive approach to refugee issues, requiring international cooperation and global governance beyond the borderland. Therefore, it is necessary to make the refugee issue one of the foreign policy agendas in the framework of value diplomacy and non-traditional security diplomacy. The East Asia Summit (EAS), ASEAN Plus Three (APT), and other consultative bodies would be desirable for discussions related to the refugee issue in Southeast Asia.

    In order to alleviate the deepening refugee crisis around the world, it is vital to eliminate the root causes of refugees. Since refugees are generally more likely to originate in conflict or fragile states, it is crucial to reduce the causes of refugee outbreaks by leveraging international development cooperation programs for social stability and economic growth in conflict and fragile states. Along with this, efforts should be made to proactively accept and support refugees through policies and programs institutionalized by a cross-cutting approach and the Framework Act on International Development Cooperation and relevant degrees.

    In this context, the Korean government must also actively develop and expand international development cooperation programs to solve the refugee issues. Over the past decade, only a tiny percentage of the international development cooperation programs implemented by South Korea have been related to refugee issues. Recently, some donor countries have used official development assistance (ODA) programs to help the receiving countries with the massive influx of refugees. Korea should also consider utilizing ODA to raise awareness of refugee issues and establish mid-long-term strategies, including allocating in-donor refugee costs, enhancing multilateral cooperation through international organizations such as IOM and UNHCR, and strengthening organic collaboration between central and local governments.

    3) Implications for international solidarity of civil society 
    Korean civic groups began a new form of international solidarity movement in the 1990s and have focused on solidarity activities with Asian countries as a core element of international affairs since the 2000s. Protecting immigrants has been a crucial component of these activities in which refugees and asylum seekers were beneficiaries. In this context, civil society's international solidarity activities have been a significant aspect concerning refugee protection in South Korea. Despite its importance, only a small number of civil society organizations have been engaged in refugee protection activities. Among the more than 10,000 organizations registered in the government's Management Information System of the Non-Profit/ Non-Governmental Organizations (NPOs or NGOs), only 14 organizations claim to conduct refugee-related activities. Even these organizations mostly focus on assisting refugees residing in Korea but barely support refugees largely located in Southeast Asia and other areas. Considering the refugee situations in Southeast Asia, such as the increasing number of refugees, the prolonged waiting times, and the geographical importance of Southeast Asia as a stopover, more groups must work on refugees in the region. It may not be easy to increase the groups only focusing on refugee issues. However, it is more feasible for other groups to extend their coverage to include refugees in healthcare, education, environment, peace, women's, and human rights movements. 

    Moreover, the Korean organizations working for refugees in Southeast Asia mainly have concentrated in some densely populated refugee areas such as Mae Sot in Thailand and Cox's Bazar in Bangladesh. As indicated by the trend of refugees entering Thailand but heading to Malaysia, refugees continue to move around in Southeast Asia and scatter to the various areas in the region. Therefore, Korean civil society needs to expand its geographic scope of activities in response to the refugee movement trend. Solidarity with local refugee support groups in the areas is one of the proper ways to overcome the limitations of human and financial resources. In addition, they should make efforts to find ways to leverage government financial resources. To this end, civil society organizations seeking to engage in refugee assistance activities need to clarify their identity as refugee assistance organizations and stand in solidarity with other like-minded organizations. This effort will increase the visibility of refugee protection activities, which in turn will increase the likelihood of categorizing refugee assistance as one of the government's policies of international development cooperation.

    It is also important for Korean civil society to note triangular cooperation in which refugee support organizations in the ASEAN countries are accustomed to working with international organizations and governments. Korean civil society organizations actively participate in the Asia Pacific Refugee Rights Network (APRRN) as part of international solidarity. However, in order to further increase the strengthening effect of solidarity, they should put an effort to encourage academia and UN organizations to be involved. In addition, they need to envision a multifaceted and comprehensive approach to refugee protection not only through legal and institutional channels, including refugee screening systems and human rights protection, but also by activating complementary pathways and collecting and evaluating refugee-related data.
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  • 중동·북아프리카 지역 에너지 보조금 정책 개혁의 영향과 사회적 인식에 관한 ..
    A Study on Energy Subsidy Reform and Perceptions in MENA

    In recent years, international efforts have been made to reduce fossil fuel-based energy subsidies as the energy transition has accelerated in response to climate change. As part of a social contract, energy subsidies have bee..

    Munsu Kang et al. Date 2023.12.29

    economic development, environmental policy
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    In recent years, international efforts have been made to reduce fossil fuel-based energy subsidies as the energy transition has accelerated in response to climate change. As part of a social contract, energy subsidies have been used to stabilize domestic prices and stimulate the economy, especially in the Middle East and North Africa. As a result, per capita energy subsidies in the Middle East and North Africa (hereafter referred to as MENA) have reached the highest levels in the world, and excessive government spending has also been identified as a factor preventing the expansion of social services for the most vulnerable. In light of the decarbonization trends and research showing that energy subsidies contribute to air pollution, subsidy policies are at a critical crossroads between reduction and maintenance. However, the Arab Spring in 2011 occurred in countries that attempted to reduce energy subsidies and resulted in consumer prices rises contributing to political instability.  More recently, the overall increase in energy subsidies since 2020 was also an attempt to stabilize the domestic situation by overcoming the economic downturn through the successive outbreaks of the COVID-19 pandemic and the Russian-Ukrainian war. Despite its importance, there is little research on the impact and social perceptions of energy subsidy policies in the MENA region with coverage since thelate 2010s.


    To fill this gap, this study focuses on the impact of energy subsidy policies on the economy and environment, and social perceptionsof energy subsidies in the MENA region. Using satellite data such as nighttime lights and air pollution concentrations, this study examines trends in energy subsidy policies and levels in the MENA region in the 2010-2021 period. Lastly, we conducted an online survey to examine awareness of energy subsidy policy and policy reform in the MENA. Based on these findings, this study proposed recommendations for energy subsidy policy reform, taking into account the the MENA context


    Chapter 2 discusses trends in energy subsidies and policy changes in the MENA. Overall, the size of energy subsidies has declined significantly since 2010. In particular, the subsidy share of GDP in 2010 reached 9%, compared to only 4% in 2016 . However, the size of the subsidies has increased again since 2016, and it is generally on the rise, with the exception of 2020, when COVID-19 took place.


    Six countries included in this study(Egypt, Lebanon, Jordan, Morocco, Tunisia, and Saudi Arabia) provided energy subsidies through social contracts under authoritarian systems of government . After reducing or suspending subsidies to ease the government's financial burden, the government budget was reduced by raising domestic fuel prices. Also, governments used their budget to support the poor, improve infrastructure, and expand social protection programs. Additionally, efforts have also been made to introduce a price indexation system for petroleum products. In several countries, including Egypt and Tunisia, this process led to anti-government protests and a return to government policies. In terms of subsidy reform, Morocco and Jordan have been considered successful. This is because Morocco, in particular, had a greater chance of success because it implemented subsidy reform in the mid-2010s, when oil prices remained low. MENA countries are constrained in their ability to reform energy subsidies because they must not only stabilize their domestic situation but also make sure that external shocks do not lead to price increases.


    In Chapter 3, we examine the impact on energy subsidies on economic activities in the MENA region. Upon examining the impact of energy subsidies on nighttime illuminance, it was found that both the proportion of subsidies to GDP and their per capita subsidy affected the brightness of nighttime lights. Subsidies on electricity, in particular, have increased the brightness of nighttime lights. This shows that reducing electricity rates through the payment of electricity subsidies increases electricity consumption in the home and service sectors, as well as having a positive effect on the industrial sector.


    Chapter 4 examines the impact of energy subsidies on air pollution. This study analyzed emissions data of three types of air pollutants, including NO2, CO, and PM25. Expansion of energy subsidies is contributing to an increase in nitrogen dioxide emissions, which can also be attributed to an increase in industrial production, electricity production, and road traffic. Specifically, electricity subsidies and natural gas subsidies contribute to nitrogen dioxide emissions, while oil subsidies contribute to ultrafine dust emissions. Previous studies have shown that energy subsidies have a relatively small impact on carbon monoxide emissions, but, a lot of carbon monoxide is produced by sandstorms, so it is unclear whether the expansion of energy subsidies has fully contributed to carbon monoxide emissions. Additionally, we found that electricity subsidies contribute to increased greenhouse gas emissions in the electricity/heating sector, as well as oil subsidies increase greenhouse gas emissions in sectors such as transportation, manufacturing and construction. Based on these findings, it is clear that energy subsidies in the MENA contribute to air pollution, and that it is necessary to gradually reduce subsidies for electricity and oil.


    Chapter 5 examines respondents' perceptions of energy subsidies in four MENA countries (Egypt, Jordan, Tunisia, and Saudi Arabia). The results of the online survey s with a total of 2,040 respondents, indicate that respondents in the MENA region generally prefer policies that reduce energy prices to those that provide social security benefits. In addition, the MENA region is unique in that it tends to oppose improving social security services as an alternative to energy subsidies. There appears to be a difference in preferences between income levels when it comes to energy subsidy policies and social security benefits. The government system should expand social security services targeting vulnerable groups in order to attract middle-income citizens . This indicates that it is important not only to improve, but also to increase awareness of groups other than low-income groups. Residents of the MENA region are more likely to agree with reducing subsidies for global efforts to combat climate change and decarbonization than with reducing subsidies for government fiscal soundness or expanding social services . A campaign to reduce energy subsidies should take this into account.


    Chapter 6 presents policy recommendations based on the previous discussion results. This study highlights the need for a gradual reduction of energy subsidies in the MENA region. Our recomendations also include 1) increasing subsidies for renewable energy, 2) improving energy efficiency policies and finances, and 3) supporting small and medium-sized enterprises that may be adversely affected by subsidy reform, 4) improving and expanding public transportation systems, 5) improving social security services, and 6) reducing fossil fuel energy subsidies as much as possible.

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  • 중동부유럽으로의 EU 확대 평가와 향후 전망
    Enlargement of the European Union: Evaluation and Outlook

    This study assesses the previous enlargement of the EU and investigates the potential enlargement EU in the future. The European Union has established itself as a politically and economically integrated community in the European r..

    Yoonjung Kim et al. Date 2023.12.29

    economic growth, economic cooperation
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    This study assesses the previous enlargement of the EU and investigates the potential enlargement EU in the future. The European Union has established itself as a politically and economically integrated community in the European region, and it continues to evolve. The biggest change in the EU in the last two decades was the massive enlargement of the EU to the countries of Central and Eastern Europe in 2004, when eight Central and Eastern European countries joined the EU together at the same time. The discussion of EU enlargement, which has been stagnant since the last enlargement when Croatia joined the EU, seems to have been revitalized by the recent Russian invasion of Ukraine. As further changes in the EU are becoming increasingly visible, the purpose of this study is to draw implications for Korea’s future strategy to cooperate with the EU candidate countries. To this end, Chapter 2 provides an understanding of the EU’s enlargement process, and Chapter 3 lays the groundwork for future conjectures through an economic and political assessment of existing Central and Eastern European countries since their accession to the EU. In addition, Chapter 4 examines the prospects for the accession of the candidate countries through a diagnosis of their current economies and governance, and Chapter 5 examines Korea’s cooperation with the existing Central and Eastern European countries and the current status of cooperation with the candidate countries. We conclude with the prospects for further enlargement of the EU and policy implications for Korea’s future cooperation in Chapter 6 .

    Chapter 2 first examines the process of EU enlargement, the incentives for enlargement from the EU’s perspective and the incentives for membership from the member states’ perspective. We then discuss how the fulfillment of the Copenhagen Criteria, a prerequisite for EU accession, is assessed. According to these criteria, a country must meet three main requirements to be eligible to join the European Union. First, politically, democracy, the rule of law, and human rights must be guaranteed, as well as the respect and protection of minorities. Second, economically, it must have a functioning market economy and sufficient capacity to withstand competition within the European Union single market. Finally, it must have the administrative capacity to apply the acquis communautaire regulations, criteria, and policies of the European Union, including its objectives as a political, economic, and monetary community. The fulfillment of the Copenhagen Criteria is assessed through the EU’s negotiation process with the accession candidates on 35 policy areas (chapters). We provide an overview of EU enlargement, with examples of the main issues that may arise during negotiations and discussions of changes in the EU’s enlargement strategy following the recent Russian invasion of Ukraine.

    Chapter 3 analyzes the economic and political outcomes of EU enlargement, focusing on the existing accession countries. The economic performance of Central and Eastern Europe after enlargement is analyzed by focusing on macroeconomic variables, such as GDP, GDP per capita, trade share with the EU, foreign direct investment (FDI) inflows, current account changes, and industrial structure changes. The beta-convergence analysis, which looks at convergence across countries, shows that Central and Eastern Europe has been able to enjoy a catch-up effect based on its high economic growth rates since joining the EU. In this regard, we can cautiously conjecture a link between the significant increase in FDI inflows and the development of the manufacturing sector following EU accession and economic growth. On the other hand, in terms of convergence within individual countries, we observe income disparities in the economic centers of each country, suggesting that EU accession is not a panacea. In the case of political performance before and after EU accession in Central and Eastern Europe, the World Governance Indicator data shows that improvements in democracy and rule of law occurred during the accession process. Microeconomic analysis using Eurobarometer data shows that individuals with relatively higher regards of their subjective economic conditions and assessments of domestic democracy are likely to have relatively more positive perceptions of the EU. Also, individuals with perceptions that the EU as a community sharing common values or political solidarity can be associated with having relatively more positive perceptions of the EU. It is worth noting that the explanatory power of the variables for evaluating the EU differs between Central and Western Europe. A detailed analysis of the mechanism is beyond the scope of this study, but it is a topic worth exploring further in future research

    Chapter 4 analyzes the overall economic conditions and industrycharacteristics of the candidate countries, focusing on macroeconomic indicators, in order to provide a more detailed analysis of the candidates’ prospects for future accession, and to identify factors that may pose challenges in the EU accession negotiation process. Although there is no direct reference to the size of economy or the income level in the EU accession negotiations, countries with low income can have issues in satisfying the Copenhagen Criteria. In particular, we found the strong negative correlation between the income level of existing accession countries at the start of negotiations and the length of time for the negotiation to join the EU. This suggests that, given the current income levels of accession candidates, it will likely be a very long time before they finally join the EU. The candidate countries are also showing relatively weak state of governance compared to the Central and Eastern Europe at their time of accession, which implies that achieving the Copenhagen Criteria and adapting to the EU legal framework is likely to be a major challenge for the candidate countries. Nevertheless, based on the current state of negotiations and the analysis in Chapter 4, we conclude that Serbia and Montenegro are the most likely candidates to join the EU, while Ukraine, given its geopolitical specificities, is also a key candidate and will be discussed in more detail in this study. However, it is unlikely that the EU will be able to rush the accession process at a rapid pace, as this could lead to a weakening of integration and increased governance problems. In addition, as accession is ultimately decided by a unanimous vote, the possibility of reducing benefits for the existing beneficiaries of EU Cohesion Funds - the countries of Central and Eastern Europe - is likely to be a major issue. For the candidate countries, it may be very difficult to fulfill the EU accession conditions if their economic and governance levels are not significantly improved, and other factors such as territorial disputes stemming from historical issues and protracted discussions may weaken the incentives for the candidate countries to improve their governance

    Chapter 5 examines the changes in economic cooperation with Korea after the accession of Central and Eastern European countries to the EU and analyzes the economic cooperation between the candidate countries and Korea. We found that FDI from Korea increased around the time of accession of Central and Eastern European countries to the EU, and that these investments were mainly concentrated in Poland, the CzechRepublic, and Hungary to establish production bases within the EU single market by taking advantage of relatively low-cost labor. Trade between Korea and Central and Eastern Europe has also increased significantly since the EU enlargement, mainly in Central and Eastern European countries with relatively better governance. The investment and trade was concentrated in manufacturing, and the data shows that automotive and construction-related industries have entered the market. In the case of the major accession candidate countries, economic cooperation is not large in terms of trade or investment currently, but in the case of Serbia, it is gradually becoming more active. In particular, it is worth noting that Serbia has lower wages and a lower corporate tax rate compared to Central and Eastern Europe, and Montenegro is the most advancedcandidate in the accession negotiations, although its trade with Korea is still minimal. In the case of Ukraine’s reconstruction project, which has received a lot of attention recently, it is necessary to consider cooperation with Poland, which is likely to be a basecamp of the reconstruction project. Forming strategic alliances with European companies that have established joint ventures with Ukrainian companies can be a recommended strategy for participating in the reconstruction project

    Chapter 6 combines the findings of the previous chapters to provide an outlook on the prospects for future EU enlargement and provides policy implications for Korean companies’ entry strategies in the accession candidate countries. At this point, it seems that it will take quite a long time for the candidate countries to join the EU, but nevertheless, the EU is increasingly adding momentum to the potential enlargement. In sum, it is necessary for Korean companies to proactively draw up strategies for entering the candidate countries in the medium to long term. Given Montenegro’s friendly relations with Serbia, it is necessary to take an integrated view of entering both countries. Since Croatia is expected to take on a large part of the shipping logistics previously handled by Slovenia due to their joining of Eurozone and the Schengen Area in 2023, the ripple effect is likely to affect Montenegro as a neighboring country of Croatia. Serbia is a candidate with relatively active trade with Korea and is considered the most likely candidate to increase trade and investment with Korea. Among the three candidate countries that we focus in this study, Serbia is more likely to take over the manufacturing role of Central and Eastern Europe in the future. We conclude that Serbia is a candidate country that should be considered for priority entry and cooperation. Ukraine’s case poses geopolitical uniqueness as Ukraine is currently at war. Due to the ongoing war and current security threats, EU accession is
    much more uncertain for Ukraine than other candidate countries. In addition, it is unclear when the reconstruction project, which has been attracting attention recently, will begin. It is crucial to utilize the existing cooperation with Poland and Korea to participate in the reconstruction project from a long-term perspective.
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  • 북한의 관세 및 비관세 제도 분석과 국제사회 편입에 대한 시사점
    North Korea’s Tariff and Non-Tariff System: Implications for Its Integration into the International Economy

    This study comprehensively analyzes North Korea’s tariff and non-tariff regimes and suggests the direction of North Korea’s tariff and non-tariff regimes in the process of reform and opening up. The purpose of the study is to an..

    Jangho Choi et al. Date 2023.12.29

    customs, North Korean economy
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    This study comprehensively analyzes North Korea’s tariff and non-tariff regimes and suggests the direction of North Korea’s tariff and non-tariff regimes in the process of reform and opening up. The purpose of the study is to analyze North Korea’s tariff and non-tariff systems to reveal the direction of the North Korean authorities’ trade policy, the structure and characteristics of the legal and institutional framework, and to identify priority reforms for the country’s future integration into the international economy. This study differs from previous studies in that it is the first to quantitatively analyze North Korea’s tariff rates system. 

    Chapter 2 examines the role of the legal system in North Korea and the history and purpose of the trade regime. North Korean authorities regulate tariff and non-tariff regimes through trade laws, customs laws, and tariff rate schedules. In North Korea, the guidance and policies of the Workers’Party take precedence over the law, but for the most part, the law governs the economy as a whole. North Korea’s customs law is similar to ours in that it aims to protect domestic industries, but it does not mention raising revenue through tariffs. In practice, however, North Korea’s tariff system appears to be used to raise revenue by absorbing foreign exchange held by private owners. One of the unique aspects of North Korea’s trade laws is that they are designed to ensure national security. This stems from the closed nature of the North Korean economy, which is designed to preventpolitical and economic influence from neighboring countries through trade, as well as the transmission of foreign cultures through imports and exports that could agitate the North Korean population and threaten the socialist system.

    Chapter 3 analyzes North Korea’s tariff rate structure and assesses its industrial protection and fiscal revenue effects. A key feature of North Korea’s tariffs is the low overall level of tariffs. The average nominal tariff rate was 5.5% and the average real tariff rate was only 4.6% based on the foreign exchange rate. Structurally, the tariffs have a sloping tariff structure with higher tariff rates depending on the level of processing, but the overall tariff level is still low enough to achieve the purpose of industrial protection. By product, the relatively high sloping rates on processed food and beverages and leather textile and haberdashery products in particular suggest an intent to protect light industrial consumer goods, but the tariff rate on these final products are not very high. While North Korea states that the purpose of its tariffs is to protect industry, there are many aspects of the tariffs that are inconsistent with North Korea’s 2005 industrial policy , known as the Military-first(Songun) Economic Policies. In terms of fiscal contribution, North Korea’s tariff revenue accounted for less than 2% of total fiscal revenue, suggesting that tariffs do not contribute much to the economy.

    Chapter 4 identifies policy and institutional factors that can be considered non-tariff barriers to the integration of North Korean trade into the international trade regime. The non-tariff barriers in the North Korean trading system can be broadly categorized into policy and institutional factors. Policy factors include the centralized governance system, the goal of building a self-reliant national economy, the qualitative strengthening of the national defense force, and the strengthening of the party-state system. To achieve, non-tariff measures arbitrarily restricted trade rights, items, and volumes. In terms of institutional elements, North Korea’s centralized trade system has identified a number of measures that can be perceived as non-tariff barriers in the entire process of trade, from planning, contracting, pricing, transportation, customs clearance, and payment. The role of North Korea’s non-tariff regime was to maintain the regime and implement state plans.

    Chapter 5 examines the historical changes in the tariff regimes of Vietnam and South Korea during their economic opening and development. Although South Korea and Vietnam had different economic systems before the reform and opening up policy, they experienced a similar increase in tariff rates in the early years of reform. The first increase in tariff rates occurred as a result of ‘tariffication’, where non-tariff barriers were converted into tariff policies, and the second increase in tariff rates for protected industries occurred as a result of the policy of differentiating tariff rates by industry sector for the purpose of industrial protection. In the early stages of North Korea’s trade system reform, tariff rates are naturally expected to increase as the country moves from a non-tariff to a tariff system, and tariff hikes to protect its industries are inevitable as it integrates into the international economy.

    Currently, North Korea’s tariff and non-tariff regimes are typical of Southeast Asian transition economies in the 1980s. Tariffs are low and fail to protect industries and raise government revenue, but the non-tariff barriers are high and serve to protect the economy. North Korea’s reform of its tariff and non-tariff regimes should consist of phasing out non-tariff barriers while raising tariff barriers to fill the gaps in trade regulations left by the removal of non-tariff barriers. To eliminate non-tariff barriers, the centralized trade administration system of trade should be abolished, the trade qualification approval system should be relaxed to limit trade to its own citizens, legal entities, and organizations, and the principle of building a self-reliant national economy should be revised to allow for integration into international value chains. In addition, North Korea’s unique logistics (transportation and ship-to-ship inspection) standards and inspection regimes, as well as trade payment methods should be harmonized with international standards. North Korea’s tariff rates should be systematically increased , with lower tariffs on raw materials and equipment in the early stages of reform, and higher tariffs on consumer and final goods.

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  • 영-미 사례를 통한 미중 패권 전환 가능성 분석: 무역, 금융, 안보, 다자주의를 중심으..
    Analyzing the Prospects of U.S.-China Hegemonic Shift: Insights from Anglo-American Perspectives on Trade, Finance, Security, and Multilateralism

    There has been extensive research on the possibility of the change of the hegemonic leadership between the U.S. and China. When we take a look back the history of the modern international relations, we can recognize that there hav..

    Ihn-Hwi Park et al. Date 2023.12.29

    international politics, political economy
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    Summary
    There has been extensive research on the possibility of the change of the hegemonic leadership between the U.S. and China. When we take a look back the history of the modern international relations, we can recognize that there have been specific leader countries who played leadership roles within each international structural stage. This means the previous experience of the leadership change between the U.K. and the U.S. should tell us some meaningful lessons to prospect the possibility of the leadership change between the U.S. and China. The research starts from this research question.

    Simply speaking, it is impossible for China to play the role of the U.S. in the areas of ① trade, ② global finance, ③ military security, and ④ multilateralism. Firstly in trade, most of the nations in the current international society pursue to maximize there national interests with the current liberal international trade order. Most of the nations never understand China should play a role to initiate the future international trade order in terms of value, institutions, leadership, and followership even with the many structural problems of the current trade order. Secondly, China, in particular, has not prepared a global financial leadership in the perspective of ‘gold-standard system’ which is one of the most critical preconditions for the global financial leadership. It is also interesting to know that the total volume of the US dollar in the global financial market has been smaller than before, and the same time the portion of the Euro and the Yen got larger, not the Chinese currency.

    Thirdly, militarily speaking, the military power of each country is the accumulated outcome of all the factors including economic power, operational capability, human resources, overseas military bases, hi-tech technology, etc. China is far behind the U.S. in the means of all of these factors. Especially, China is not able to use all the military resources only to face the U.S. due to the long border lines with two nuclear powers, Russia and India, and the vulnerability of the geographic conditions of the 14 neighboring countries. Lastly, the two countries may engage relatively a close competition to initiate each own-centric multilateralism. But the Chinese self-oriented principles and world view could be a critical barrier to expand the idea of China’s world order, multilateralism, mutual interests, etc.

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  • 기업결합과 혁신: 미국 디지털플랫폼과 경쟁정책을 중심으로
    Merger and Innovation: Focusing on the U.S. Digital Platforms and Competition Policy

    This study analyzes the impact of the large U.S. digital platforms such as GAFAM (Google, Apple, Facebook, Amazon, Microsoft) on their performance in terms of innovation and sales, focusing on their mergers and acquisitions (M&..

    Gusang Kang et al. Date 2023.12.29

    competition policy, 지식재산권
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    This study analyzes the impact of the large U.S. digital platforms such as GAFAM (Google, Apple, Facebook, Amazon, Microsoft) on their performance in terms of innovation and sales, focusing on their mergers and acquisitions (M&A) activities targeting numerous small and medium-sized enterprises over the past 20 years. It also identifies ‘killer acquisitions’, where these platforms acquire innovative companies that could become potential competitors, thereby potentially reducing future market competition. The study provides insights and policy implications for the Korean Fair Trade Commission’s merger review process for digital platforms.

    Chapter 2 reviews the literature on the relationship between M&A and innovation and discusses the motives for M&A in the digital platform market, including ‘killer acquisitions’. Traditional M&A motives such as economies of scale and scope, acquisition of unique technologies or new distribution channels, and increased market dominance are contrasted with those in the digital platform industry, which include securing core assets like technology, processes, and intellectual property. Recent literature has raised concerns about ‘killer acquisitions’ that may reduce or eliminate future competition, although the definition of ‘particularly competitive future competitors’ and the limited pre-emptive merger policy pose challenges.

    Chapter 3 examines the types, characteristics, and status of M&As conducted by GAFAM, categorizing them into vertical, horizontal, and conglomerate mergers. Despite the unique characteristics of the digital platform industry, most M&As have been approved by the U.S. competition authorities. However, this has led to criticism of high market concentration. Recent arguments suggest the need to actively incorporate data characteristics in assessing the competitive restraints of M&A.

    Chapter 4 conducts an empirical analysis of the impact of digital platform M&A on firm performance. It examines how ‘killer acquisitions’ affect innovation performance, using patent applications and citations as indicators. The results show that killer acquisitions have a statistically significant negative impact on patent applications, suggesting potential negative effects on overall innovation performance. We also estimate the impact of digital platform M&A on the sales of both acquiring and acquired companies, and find revealing increased sales for the acquiring firms but decreased sales for the acquired firms.

    Based on these findings, Chapter 5 suggests the following policy implications: 1) using patent data and other metrics to evaluate digital platform mergers, 2) examining methodologies such as technology similarity indicators to identify killer acquisitions, 3) considering post-regulation rather than pre-regulation, and 4) shifting the burden of proof of market competition restriction from competition authorities to the digital platforms themselves.
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  • 아세안 경제통합의 진행상황 평가와 한국의 대응 방향: TBT와 SPS를 중심으로
    Assessing ASEAN Economic Integration Progress and South Korea’s Approach: Focus on TBT and SPS

    TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary Measures) have two attributes. They act as barriers to trade expansion by protecting producers, but their importance has grown in terms of consumer protection m..

    Sungil Kwak et al. Date 2023.12.29

    economic integration, barrier to trade
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    TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary Measures) have two attributes. They act as barriers to trade expansion by protecting producers, but their importance has grown in terms of consumer protection measures after the COVID-19 pandemic. Rather than eliminating related regulations,  achieving harmonization within the ASEAN region can simultaneously serve two objectives: expanding trade between South Korea and ASEAN and improving consumer protection. We assess the level of regional economic integration by measuring regulatory distances among ASEAN member states. We also measure regulatory distances between South Korea and ASEAN, and between Japan and ASEAN. We estimate the impact of ASEAN’s TBT and SPS on the export performance of countries exporting goods to the ASEAN region. In addition, a survey of South Korean firms exporting goods to the ASEAN region is conducted to assess their difficulties and to evaluate South Korea’s support policies.

    Chapter 2 evaluates the economic integration efforts within the ASEAN region, focusing on TBT and SPS. In 2020, ASEAN conducted a mid-term assessment of economic integration and produced the “Mid-Term Review: ASEAN Economic Blueprint 2025” in 2021. According to the results, ASEAN has achieved 54.1% of the sectoral work plans, with the remaining 34.2% currently underway and expected to be achieved without major problems. The ASEAN recognizes the need for regional integration to overcome the poly-crises facing the global economy. ASEAN Comprehensive Recovery Framework (ACRF) views economic integration as a means of recovery from the COVID-19 pandemic and the associated poly-crises. As a result, intra-ASEAN trade and investment have  increased steadily since 2021. 

    A notable harmonization effort for non-tariff measures such as TBT and SPS in the ACRF is the development and application of the “Non-Tariff Measures Cost-Effectiveness Toolkit.” This toolkit encourages individual ASEAN member states to assess both the introduction process and the cost-effectiveness of their non-tariff measures, thereby promoting harmonization. Additionally, the “Framework for Circular Economy for the ASEAN Economic Community,” adopted by ASEAN in 2021, can be seen as an effort to harmonized regulations related to circular goods and services. While existing regulations in manufacturing sectors may require more time to harmonize because they are already in place, emerging sectors like circular goods and services can flexibly seek regulatory harmonization within the ASEAN region due to their ongoing establishment. By achieving standard harmonization and mutual recognition agreements for these sectors, South Korea and ASEAN can anticipate efficiency gains and regional integration, resulting in  trade facilitation effects between the two regions.

    Furthermore, an analysis of TBT and SPS cases in Vietnam and Indonesia, key partners in the “Korea-ASEAN Solidarity Initiative (KASI),” aimed at assisting South Korean firms to  enter the ASEAN region. Indonesia still faces issues related to certification and testing, including ‘halal’ certification. Vietnam, despite its high level of integration into the global economy as evidenced by its high trade dependence, has not implemented high-level TBT and SPS measures due to the low technological competitiveness of its domestic and indigenous firms. However, there are concerns about the transparency and adequacy of the implementation process. Capacity building is urgently needed in Vietnam and Indonesia to ensure the transparent use of SPS and TBT for public purposes. 

    Chapter 3 first measured regulatory distances among ASEAN member states (AMS) from 2015 to 2018. During this period, it was observed that TBT and SPS regulatory distances among AMS increased, indicating a lack of regulatory harmonization within the ASEAN region. This can be attributed to the rapid economic growth, leading AMS to focus more on protecting their own citizens. It should be noted, however, that the data used in the study is only available up to 2018, making it  impossible to compare with the more recent results. As discussed in Chapter 2, ASEAN has made harmonization efforts in response to the COVID-19 pandemic and poly-crises. Therefore, it is expected that regulatory gaps will decrease as the 2025 integration target approaches.

    Second, using Multidimensional Scaling (MDS), TBT and SPS regulatory distances between South Korea and ASEAN are found to be greater than those between Japan and ASEAN. When the average SPS regulatory distance index between South Korea, Japan, and ASEAN Member States (AMS) is plotted using MDS, South Korea is located further away from Japan and the AMS. This indicates that South Korea’s SPS regulations appear to be heterogeneous compared to those of Japan and AMS. Regarding TBT, except for Vietnam and Cambodia, Japan and the AMS are  close to each other, while South Korea is far from the AMS. This result can be attributed to Japan’s historical contributions to ASEAN’s institutional establishment through the activities of ERIA and ADB. South Korea needs to actively participate in projects aimed at strengthening institutional linkages between South Korea and ASEAN, in particular, in emerging sectors like environmental and digital industries, in order to harmonize the SPS and TBT regulations in these new sectors. 

    Third, industries in South Korea that are vulnerable to ASEAN SPS and TBT regulations, as selected by trade experts using the Analytic Hierarchy Process (AHP), include food, general vehicles, steel, boiler machinery, toys, and others. Regarding SPS, food products are found to be more significantly affected than animal and vegetable products, while concerning TBT, transportation, iron and steel, boilers and machinery, and toys are expected to be more affected.

    Fourth, in industries closely linked to global value chains, the regulatory distances of TBT are shorter, but the distances of SPS between South Korea and ASEAN are relatively longer. In the MDS analysis of TBT, the industries in which South Korea has a comparative advantage in the ASEAN region are located closer to AMS and Japan. This suggests that increasing regulatory similarity between South Korea and AMS will potentially accelerate regional integration through expanded trade. On the other hand, industries highly affected by SPS, such as meat and fish products, and fruit and vegetable  products, are found to be far from South Korea and other AMS. This divergence can be attributed to significant differences in institutional arrangements in these sectors and income disparities between South Korea and the AMS.

    Fifth, the average regulatory index of TBT between South Korea and each AMS shows significant differences, particularly in high-technology industries such as chemicals and machinery. On the other hand, low-technology industries such as plastics/rubber and textiles/apparel have shorter regulatory distances of TBT on average. Therefore, it can be assumed that the likelihood of TBT-related problems affecting South Korea’s exports to the ASEAN region is low for low-tech industries like textiles/apparel and plastics/rubber. However, in high-technology-intensive industries like chemicals and machinery, South Korea’s exporters are more likely to encounter TBT-related issues. This finding is consistent with the previous AHP analysis.

    Sixth, countries classified as high-income nations, such as Singapore and Brunei, have shorter regulatory distances than South Korea. However, significant regulatory disparities are observed between South Korea and Cambodia, a low-income country. This aligns with previous research findings suggesting a higher degree of regulatory similarity among countries with similar income levels. Therefore, Singapore can be seen as  a valuable focal point for South Korea to harmonize regulations with ASEAN member states.

    In Chapter 4, we first examine the current status and characteristics of non-tariff measures in the ASEAN member states using TBT/SPS notifications and Specific Trade Concern (STC) cases. We find three stylized facts. First, within the ASEAN region, continental countries have more TBT measures, while maritime countries have more SPS measures. This finding is particularly evident when considering only STC cases. The relatively higher-income maritime countries in the ASEAN region may have adopted more advanced measures due to their technological development. On the other hand, lower-income continental countries seem to adopt TBT and SPS measures later than higher-income countries, possibly because their economies have grown rapidly  in recent years, allowing them to catch up with the measures introduced by advanced countries. 

    It is expected that the economic impact of TBT and SPS will vary depending on the geographical, economic, cultural, and social differences between continental and maritime countries. Therefore, South Korea should formulate flexible strategies to address TBT and SPS in the ASEAN region, taking into account regional and country-specific characteristics.

    Second, the number of TBT/SPS notifications and Specific Trade Concern (STC) cases for primary processed products, as well as chemicals, and electronic equipment, has been on the rise recently. These industries are identified as vulnerable sectors for South Korea in Chapter 3 on ASEAN’s TBT and SPS measures. Therefore, South Korea needs to develop policies specifically for high value-added manufacturing. Considering that most ASEAN member states seek to promote the materials and parts industries of chemical and electronic equipment, there is a high likelihood that TBT/SPS measures  for these industries will be strengthened within the ASEAN region.

    Third, in formulating policies for ASEAN non-tariff measures, we must consider our current economic situation. The extent of trade-restrictive  and trade-promotion effects of TBT/SPS will vary depending on the economic conditions of the exporting countries. For example, if we look at the countries raising Specific Trade Concerns (STC) regarding TBT/SPS, we can see  that for TBT, it is mainly advanced countries that raise concerns, while for SPS, both advanced nations and developing countries participate in raising the concerns.

    In chapter 4, we estimate the impact of TBT and SPS of ASEAN member states on the exports of 213 exporting countries to the ASEAN region from 1996 to 2021, using gravity models with fixed effects. The results of the estimation can be summarized into three main points.

    First, non-tariff measures in the ASEAN region do not significantly affect the exports of countries to Southeast Asia as a whole. However, exports from OECD countries are significantly negatively affected by ASEAN TBT measures, while exports from non-OECD countries are significantly negatively affected by ASEAN SPS measures. This is consistent with  the fact that ASEAN TBT measures are primarily targeted at advanced countries, which is consistent with the  stylized facts presented earlier. Moreover, it is evident that ASEAN TBT measures became a significant barrier to exports from advanced countries to the ASEAN region in the 2010s. This aligns with the stylized facts earlier that shows an increase in Specific Trade Concern (STC) cases raised by advanced countries regarding ASEAN TBT measures in the 2010s. Therefore, South Korea, as an OECD country, needs to focus more on developing policies to address TBT rather than SPS. That’s why, in chapter 5, we conduct a survey on TBT measures among Korean firms exporting goods to the ASEAN region.

    Second, SPS is found to be a significant barrier in the continental ASEAN  countries. This is due to the fact that countries located in the continental part of the ASEAN region, such as Cambodia, Laos, Myanmar, and Vietnam, have relatively less advanced industrial structures compared to the maritime part. In the 2010s, TBT served as a significant trade barrier in the ASEAN maritime region. Given the relative development in the maritime region compared to the continental region, there is a significant potential for  more active use of TBT measures based on technological advantages. Therefore, there is a need to pro-actively develop appropriate strategies  for this situation. This finding aligns with local expert interviews, which indicated that it may be challenging for domestic firms to raise TBT to a high level in countries that are still in the process of development, such as Vietnam.

    Third, overall, it is revealed that ASEAN’s TBT and SPS measures do not significantly affect intra-ASEAN trade. However, they did have a statistically significant impact on  intra-ASEAN trade negatively in the 2010s. This aligns with the findings from the stylized facts presented earlier, which showed the emergence of TBT and SPS-related STCs among ASEAN Member States (AMS) in the mid to late 2010s.  Furthermore, it aligns with the results from Chapter 3, which indicated that the regulatory distances between AMS widened from 2015 to 2018. This suggests that regulatory harmonization and standardization will be crucial for the expansion of intra-ASEAN trade in the future ASEAN economic integration process. In fact, ASEAN’s efforts for regulatory harmonization and standardization have been ongoing, especially since the COVID-19 pandemic, as confirmed in Chapter 2. 

    Moreover, given the high similarity between AMS’s regulations and institutions and those of Japan, South Korea, which aspires to be a global pivot state, should actively engage in improving AMS’s regulations and institutions, particularly in emerging sectors such as the digital economy and environmental goods within the ASEAN region. Such efforts can enhance not only trade but also South Korea’s standing in the international community.

    Chapter 5 collected opinions through surveys of South Korean manufacturing firms exporting goods to the ASEAN region. The surveys aimed to gather insights on TBT-related challenges, areas requiring improvement, the similarity of TBT by ASEAN member states/region, evaluations of support policies, and additional support policies. The survey results can be summarized into the following five points.

    First, the impact of TBT varies depending on the characteristics of the firms. As noted above, TBT generates both trade-restrictive and trade-promotion effects. Among the firms that participated in the survey, 57.2% identified the excessive increase in compliance costs due to TBT as the most significant obstacle. Lack of Information  and technological deficiencies were also mentioned as challenges. On the other hand, other responding firms, not considering TBT as an obstacle, reported TBT’s positive impacts, such as enhancing their sales and export capabilities, increasing consumer trust in their products, and improving the dissemination of market information. Therefore, when policy-makers formulate support policies for the firms, it is important for them to recognize that the impact of TBT varies across the characteristics of the firms. Additionally, it is crucial for policy-makers to provide related information and best practices where TBT is helpful in promoting exports to the ASEAN region, particularly to small and medium-sized enterprises.

    Second, South Korean export firms face the most significant challenges in obtaining certifications related to TBT. In the survey, firms identify “lengthy certification acquisition time” as the biggest challenge of TBT to overcome when exporting to the ASEAN region. In addition, they express difficulties related to unclear regulations, uncertain certification procedures, lack of alignment with international standards, and  significant burden of certification acquisition costs.

    Third, despite ASEAN’s efforts to harmonize regulations, differences in TBT between the continental and maritime regions persist. ASEAN has launched the ASEAN Economic Community, aiming to create a “single market and single production base” by the end of 2015. As mentioned in Chapter 2, with the completion of the ASEAN Free Trade Area (AFTA), six advanced ASEAN member states (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) have already achieved a 99.29% of tariff line coverage, while the four less advanced ASEAN member states (Cambodia, Laos, Myanmar, and Vietnam) have achieved 98.64% of tariff line coverage for intra-regional trade.

    Efforts were made to harmonize TBT/SPS through the ASEAN Comprehensive Recovery Framework (ACRF), which was launched in November 2020 with the aim of eliminating non-tariff measures in the region and achieving ASEAN integration. However, disparities in TBTs still existed between the continental and maritime regions and varied across  countries. More than half of the firms surveyed  indicated that TBTs among ASEAN member states still differ significantly. In particular, the survey results showed that responses indicating significant differences between TBT in the continental and maritime regions accounted for more than half of all responses. This finding is also confirmed by the results of the quantitative analysis  in Chapter 4. 

    Fourth, there is a need to expand access to government support for TBT. The survey on firms’ awareness and use (including future plans) of  government support policies related to ASEAN TBT compliance shows that although firms are willing to use the support policies, they often do not use them due to a lack of awareness. This is why, despite South Korea having a systematic TBT response system centered around the Korean Agency for Technology and Standards (KATS), firms expressed that government support policies related to TBT are still insufficient. However, the good news is that the majority of firms responded that government support is helpful in solving problems. In other words, if firms receive government support when needed, they can minimize their losses. By enhancing promotional activities for TBT support policies, including seminars, consulting support, and educational materials, firms are expected to make better use of government support policies.

    Finally, concerning TBT, South Korean firms emphasize the importance of monitoring changes in foreign government regulations, promoting the internationalization of technical standardization projects, and supporting the expansion of Korean testing and certification institutions abroad. Since obtaining certification is the biggest challenge for these firms, they advocate for simplifying the certification acquisition process, streamlining certification requirements, standardizing country-specific certification procedures, and expanding testing institutions. Collaboration with ASEAN member states (AMS) is seen as a key way to achieve these goals. Simplifying and standardizing ASEAN’s TBT procedures would not only facilitate trade between South Korea and AMS but also contribute to the overall economic integration of ASEAN.

    Based on the research results above, this study presents four policy directions:

    1. Strengthening Collaboration for Regulatory Harmonization in ASEAN: It is essential to strengthen  cooperation for regulatory harmonization with the ASEAN member states (AMD). The local scholar meetings held in Vietnam and Indonesia also stressed the need for capacity building among  officials responsible for TBT and SPS in the ASEAN region. As future trade between the two regions is expected to revolve primarily around high-tech industries, proactive efforts are needed to harmonize technical regulations. This will help reduce regulatory disparities between the two regions. As seen earlier, ASEAN’s regulations for traditional manufacturing industries were already similar to Japan’s. South Korea should focus on regulatory harmonization in emerging sectors such as the digital economy and environmental industries.

    2. Consideration of a South Korea-ASEAN Joint Certification Center: The second policy direction is to  consider the establishment of a joint South Korea-ASEAN  certification center to facilitate flexible responses. This is crucial because the impact of TBT/SPS on exports may vary by product, time, and country. The study’s results highlight the regulatory differences between the maritime and continental parts of the ASEAN region, which affect South Korea’s exports to the region differently. By setting up an ASEAN-based certification center, with Singapore as a potential hub due to its closest regulatory distance to South Korea, and by strengthening the network with other ASEAN member states, more flexible responses to changes in AMS’s TBT/SPS measures can be achieved. The survey results in Chapter 5 also support the establishment of a Joint Certification Center. 

    3. Proposal for the Establishment of an ASEAN Integrated Standard Accreditation System: The third policy direction proposes the establishment of an ASEAN Integrated Standard Accreditation System. This is a challenging proposal, given   the diverse geographical, economic, social, and cultural characteristics of ten ASEAN member states. However, it could be piloted initially for universal safety standard requirements for electrical and electronic products or for new products without established regulations. If successful, it could be gradually expanded. The creation of a working group for this purpose, with South Korea’s participation, could promote regulatory harmonization between South Korea and the ASEAN member states.

    4. Strengthening the Interconnection among the National Trade Repositories of 10 ASEAN Member States: The fourth policy direction highlights the need to support the strengthening of linkages between the National Trade Repository (NTR) of 10 ASEAN Member States (AMS) and the ASEAN Trade Repository (ATR). A Trade Repository serves as an information repository that collects information on each country’s tariff and non-tariff measures. Due to the significant development gap among the 10 AMS, there are differences  in the capacity to operate national trade repositories. To ensure the effective consolidation of information from national repositories into the ASEAN Trade Repository, it is necessary to develop and improve the capacity to manage and operate these national repositories. With proper data aggregation, the utility of the current ASEAN Trade Repository can be enhanced and it can lead to more active research in this area.

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