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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 tradeDownloadContentSummaryThe 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. -
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 cooperationDownloadContentSummaryRecently, 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 policiesThe 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 cooperationThe 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 societyKorean 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. -
Developing an International Macroeconomic Forecasting Model Based on Big Data
The economic uncertainties arising from recent global inflation and the Covid-19 pandemic have significantly amplified the importance of accuracy and timeliness in macroeconomic forecasts. To enhance the predictive abilities of mo..
Yaein Baek et al. Date 2023.12.29
economic growth, Economic outlookDownloadContentSummaryThe economic uncertainties arising from recent global inflation and the Covid-19 pandemic have significantly amplified the importance of accuracy and timeliness in macroeconomic forecasts. To enhance the predictive abilities of models, harnessing all potentially relevant information is crucial. The advent of big data has spurred active exploration in economic forecasting research, leveraging additional data dimensions. Notably, text data such as online searches and news articles are widely employed to extract sentiments of economic agents, thereby monitoring economic and financial conditions. Additionally, machine learning has emerged as a pivotal tool in macroeconomic forecasting because it efficiently processes and analyzes big data. Given the potential benefits of big data for forecasting and the ongoing development of new methodologies, a collective analysis of forecasts based on big data and traditional macroeconomic models is essential. In this study, we analyze the predictive ability of short-term GDP growth rate forecasts based on big data against those generated by traditional statistical and structural macroeconomic models. Given the contrasting characteristics between big data-based forecasting models and structural models, we comprehensively analyze the results of each model and discuss implications for future economic forecasting research.This study largely consists of four parts. In Chapter 2, we utilize a small open economy dynamic stochastic general equilibrium model (SOE-DSGE) to forecast Korea’s GDP growth. This theoretical model serves as a benchmark for comparing against big data-based forecasts. Using a Bayesian framework, the model examines the impacts of various shocks, such as those related to total factor productivity, government spending, monetary policy, foreign demand, and foreign monetary policy. The findings reveal that the response of model variables to external shocks align with real-world outcomes. One of the strengths of the SOE-DSGE model is that it explicitly includes structural shocks, allowing us to analyze not only forecasts but also the effects of economic policies. However, a limitation is its inability to fully leverage available data due to inherent model constraints.In Chapter 3, we estimate machine learning and traditional econometric models based on a large set of macroeconomic and financial indicators to obtain forecasts of GDP growth in the United States and South Korea. We consider machine learning methods that have shown good predictive performance in previous studies, such as random forests, XGBoost, LSTM, and hybrid methods. For conventional econometric models, we employ the autoregressive model (AR) as a benchmark, along with the Dynamic Factor Model (DFM) and the Diffusion Index Model, both capable of utilizing a large number of predictors. The findings underscore the positive impact of utilizing big data on enhancing the predictive ability of GDP growth forecasts, particularly through machine learning. In the case of the U.S., machine learning outperforms econometric models, reducing forecast errors by up to 34% (measured by RMSE) compared to the AR model at a one-quarter forecast horizon. Although many of these improvements lack statistical significance, machine learning exhibits significant forecasting performance one quarter ahead when excluding periods of financial crises. For South Korea, the performance of machine learning in GDP forecasting is not as pronounced as in the U.S., but improvements have been evident since the 2000s. Unlike in the U.S., both machine learning and the DFM exhibit similar predictive abilities, notably performing well during financial crises periods. Consequently, it’s crucial to note that the forecast performance of machine learning models using big data may vary based on factors such as the country, forecast horizon, time period, and sample size.In Chapter 4, we classify Naver search data as unstructured and employ dynamic model averaging and selection (DMA and DMS) to predict South Korea’s GDP growth rate. Utilizing eight widely accepted macro-financial indicators as predictors of GDP growth, we create a search index by standardizing the search volume of Naver terms linked to each variable. Based on the idea that online search data is useful for selecting the most influential predictors of economic growth at specific junctures, we integrate the Naver search index as the selection probability of the dynamic model. Our findings reveal that DMA and DMS incorporating the search index, exhibit significantly superior forecasting abilities compared to AR, and also outperforms the OLS employing the same predictors. Moreover, while forecasting models typically exhibit regression towards the mean, DMA and DMS excel in predicting turning points in GDP growth, making them useful for predicting economic fluctuations.Chapter 5 synthesizes findings from preceding chapters and compares forecasts for Korea, offering insights into future economic forecasting research. Firstly, our results affirm that employing big data enhances the accuracy of economic growth forecasts, which is consistent with the expectation that a richer dataset can unveil important additional information. Secondly, it is necessary to construct a comprehensive macroeconomic database by sourcing information from diverse channels. Our findings show that forecasts integrating the Naver Search Index demonstrate proficiency in predicting sharp fluctuations in economic growth compared to forecasts reliant solely on structured data, indicating the timeliness of online search data in reflecting real-time consumer economic sentiment. This highlights its utility in forecasting evolving economic landscapes, capturing insights beyond existing structured datasets. Lastly, in addition to building databases, we need to innovate and explore new analytical methodologies for economic forecasting. While statistical methods utilizing numerous predictors exists and are widely used, our study reveals the relatively superior predictive performance of machine learning when applied to the same dataset. Although it is difficult to entirely replace existing forecasting models or the qualitative judgment of economists, machine learning-based economic forecasts can serve as supplementary indicators that can be used as a reference for the final forecast or the assessment of the economic landscape. -
A Study on Korea-India Shipping and Port Industry Cooperation
The purpose of this study is to propose cooperation measures in shipping and ports between Korea and India. To achieve this goal, we propose specific cooperation measures and policy tasks between the two countries. To this end, in..
Hyung-JIn Chun et al. Date 2023.12.29
economic growth, Economic cooperationDownloadContentSummaryThe purpose of this study is to propose cooperation measures in shipping and ports between Korea and India. To achieve this goal, we propose specific cooperation measures and policy tasks between the two countries. To this end, in Chapter 2, this study identified the cooperation environment in India’s shipping and port sectors in connection with the growth of the Indian economy. In Chapter 3, it examined India’s shipping and port policies and the current status of companies. In Chapter 4, it examined India’s shipping and port policies and the current status of companies. Shipping and port logistics infrastructure was analyzed focusing on the Chennai and Kolkata regions. In addition, Chapter 5 identified the demand for cooperation between Korea and India and proposed cooperation plans in shipping, ports, and international multimodal transportation, and Chapter 6 presented cooperation plans and demonstrations in shipping, ports, and international multimodal transportation between Korea and India based on the analysis results in Chapter 5. Promotion tasks for each project and related ministries and institutions were proposed.In Chapter 2, it was discovered that India’s shipping and ports pursued policies such as modernization of ports, expansion of connectivity, port-led industrialization, and improvement of logistics efficiency under the Modi government. Due to the rapid growth of the Indian economy, shipping volume has also increased rapidly, and the role of major ports such as JNPT and Mumbai Port has increased significantly. Indian merchant ships are small, and the shipbuilding industry is small compared to the size of the economy, so containerization is insufficient. However, there is high development potential as trade diversification expands along with economic growth in the future. If the high growth trend of the Indian economy continues, the complementary relationship between Korea and India will further expand, and the possibility of using Indian shipping and ports is higher, so a foundation for cooperation is needed.In Chapter 3, it was identified that India’s shipping and port policies are shifting to respond to India’s expanded role following the reorganization of the global supply chain. The Indian government is proposing various policies focusing on improving infrastructure related to shipping logistics, and related investments are also being made. Although companies in Indian shipping ports are small, they have ample growth potential, and the use of containers is expected to increase through logistics standardization, so there is a need to explore cooperation strategies in related fields. Accordingly, there is a high possibility of participation in port redevelopment and new port development, and it is possible to participate in terminal operation in the form of a merger with related companies.Chapter 4 shows that India’s major ports have high potential in terms of their roles and competitiveness, and that ports in the three major regions are pursuing various projects and policies to strengthen port competitiveness, such as port modernization, strengthening connectivity, and strengthening internal capabilities. Three major ports, including Navasheva Port, Paradiv Port, and Chennai Port, account for most of the container cargo. Fossil fuels are mainly handled by Dindaya Port, Mumbai Port, and Paradiv Port. Ports in India’s three major regions were evaluated to have secured transportation networks for each port in response to the rapid increase in cargo volume, improved internal infrastructure, and secured logistics networks connecting roads and railroads. In India, various projects such as port modernization, connectivity enhancement, and internal capacity building are being promoted by the central government, local governments, and individual port organizations, and the construction of additional terminals is being promoted for each port. In addition, it is important to secure complex logistics bases at each major base to improve land logistics conditions.In Chapter 5, in order to specify international cooperation in the shipping and port sectors, the demand for cooperation between Korea and India was reviewed and general areas of cooperation were proposed. For this purpose, a review of existing literature, interviews with container shipping companies, expert interviews, AHP techniques, and ODA expert inverview were utilized. Summarizing the results using this methodology, the areas that should be considered priority for cooperation between the two countries are port construction and operation. Of these, container terminal construction should be considered first, followed by cooperation on new port construction and operation. must be reviewed. Next, it is necessary to expand the customs clearance agency business into areas including multimodal transportation that can provide door-to-door transportation. Meanwhile, for ODCY and ICD, there were difficulties in purchasing land, obtaining permits, and complicated procedures when entering new markets, so it was concluded that taking over the existing system was appropriate.Chapter 6 proposes cooperation measures and pilot projects in the shipping and port sectors between Korea and India based on the results of Chapter 5. In detail, the shipping market is concerned with regular container transportation and other shipping, shipbuilding, and port construction operations. Cooperation plans and pilot projects were proposed for new port construction, existing ports, port hinterland linkage infrastructure, port hinterland logistics centers, etc., and port/ rear area complex transportation, respectively, for customs clearance agency and forwarding, trucking, ODCY, and ICD. In addition, comprehensive opinions on cooperation measures and pilot projects in the shipping and port sectors between Korea and India were described, and policy tasks for each relevant ministry were proposed based on the above policy proposals. In addition, implications for the advancement of related businesses such as construction and transportation operators in transportation infrastructure such as port infrastructure, roads, and railroads were described. -
Analysis on Low-carbon Policies of Major Sub-Saharan African Counties and Cooperation in Clean Energy Sector
This study analyzed the policies and current challenges in the decarbonization sector, renewable energy sector and the critical minerals sector of Sub- Saharan African(SSA) regions, as well as the market entry status and strategie..
Sungkyu Lee et al. Date 2023.11.29
Economic cooperation, Energy industryDownloadContentSummaryThis study analyzed the policies and current challenges in the decarbonization sector, renewable energy sector and the critical minerals sector of Sub- Saharan African(SSA) regions, as well as the market entry status and strategies of major countries. Through such analysis, recommendations were presented at both government and corporate levels for the enhancement of cooperation in the decarbonization, renewable energy and critical minerals sectors among SSA region.At the government level, it is necessary to share policy implementation experiences and participate in multilateral decarbonization cooperative projects in each sector. At the corporate level, it is crucial to develop and implement cooperative projects that can contribute to fostering the renewable energy industry and job creation in SSA region. Furthermore, considering the elevated investment risks, it would be need to explore joint market entry with foreign companies from countries like Europe, United States, China and others that have extensive experience in market entry. In particular, in the critical minerals sector, it is necessary to expand both concessional and non-concessional support for partner countries, strengthen resource diplomacy, strategically utilize mineral security partnerships, and, in the mid-long term, increase support for credit, guarantees and insurance to facilitate the expansion of investment and market entry. -
Economic Security in the Indo-Pacific Region: Domestic Political Dynamics of Key Countries and Korea’s Economic Security Strategy
As U.S.-China geopolitical and geoeconomic competition intensifies in the Indo-Pacific region, economic security has become an important issue. This study analyzes the Indo-Pacific strategies of key countries, particul..
Jae Jeok Park et al. Date 2023.09.13
economic security, Political EconomyDownloadContentSummaryAs U.S.-China geopolitical and geoeconomic competition intensifies in the Indo-Pacific region, economic security has become an important issue. This study analyzes the Indo-Pacific strategies of key countries, particularly their economic security policies, focusing on domestic political factors. It also suggests considerations for Korea’s economic security strategy and policy in its bilateral relations with key countries and in the context of the Indo-Pacific region as a whole.The study comprises ten chapters, including an introduction. Chapter 2 situates economic security in the context of the geopolitical and geoeconomic competition in the Indo-Pacific region and critically reviews existing studies on the concept and discourse of economic security. It then provides the theoretical context for the case studies that follow by discussing the interaction between domestic and international politics.Chapters 3 through 7 are case studies. They examine the economic security policies of five countries facing different domestic political environments. All case studies are organized in the following order: (1) background and definition of the economic security discourse in Country X, (2) principles of economic security policy of country X, (3) domestic political variables of country X that affect its economic security policy in the Indo-Pacific region, (4) two representative examples of how country X’s economic security policy has been influenced by domestic political variables, and (5) prediction of country X’s future economic security policy based on these domestic political factors. Chapter 8 examines China’s approach to the US-led economic security in the Indo-Pacific.Chapter 9 concludes the study by exploring the implications of the preceding discussions for Korea’s economic security strategy. The first part considers the bilateral dimension between Korea and country X, while the second part looks at the overall implications for Korea from an Indo-Pacific economic security perspective. -
Research on Green Energy Cooperation with East Africa
Sub-Saharan Africa is under pressure domestically and from abroad to achieve both economic growth through better access to energy and a sustainable environment through decarbonization simultaneously. Africa has generated energy th..
Munsu Kang et al. Date 2023.06.08
Energy industry Africa Middle EastDownloadContentSummarySub-Saharan Africa is under pressure domestically and from abroad to achieve both economic growth through better access to energy and a sustainable environment through decarbonization simultaneously. Africa has generated energy through renewable sources such as hydro-power and geothermal energy but demand for stand-alone energy generation has increased recently to improve access to energy in the rural areas. In addition, green energy has gained importance for rural energy access as the unit costs of solar and wind energy generation dropped rapidly. This research examines East Africa’s demand for green energy and current policies, together with cooperation measures in the international community, and analyzes reasons for applying solar energy technology through a case study designed to derive policy implications on Korea’s energy sector cooperation.Chapter 2 examines the energy access and green energy development status of Africa on a state level. Access to clean energy for power and cooking have improved considerably across Africa but the absolute access rate remains low compared to other regions. The study further examines energy access and green energy policies for Uganda, Kenya and Tanzania in particular. The three countries all have policies to improve energy access especially for the rural areas, and have established rural energy administrations. They also seek to establish a foundation for rural energy access through small-scale energy generation by introducing stand-alone generation facilities in the rural areas, in addition to the conventional electrification policies. To this end, private sector participation in the energy market is crucial, and thus governments in the region seek to provide incentives for small-scale energy generation by private companies. In regard to policies, Kenya’s policy index is high while that of Tanzania and Uganda need improvement.Chapter 3 derives implications for Korea by examining the cooperation strategies and policies of international organizations such as the World Bank and UNDP, as well as partner countries including the US and Sweden regarding the green energy sector in East Africa. The US seeks to increase the region’s generation capacity up to 30,000MW by 2030 and provides large scale support to Africa’s energy sector through its Power Africa initiative. Solar energy and wind power consists up to 33% and 15% each in the program, emphasizing the importance of green energy for the US. Kenya and Tanzania are the prime beneficiaries of the Power Africa initiative among the 30 countries in participation. EU’s Africa Europe Energy Partnership (AEEP) seeks to provide electricity to 100 million people by 2020 through hydro, wind and solar energy to improve green energy supply, strengthen energy security between the EU and Africa, and to increase energy efficiency in Africa. EU member countries have formed a Team Europe platform with institutions such as the European Investment Bank, and European Bank for Reconstruction and Development, through which it seeks to create a green energy initiative, as well as an environment for green energy production and investment. The World Bank and UNDP have led support to improve energy access and increase energy efficiency in Africa among international organizations. Support is given to hydro and offshore wind power as well as for stand-alone solar energy as access to electricity and the increase of green energy power generation have become the core objectives of these institutions.Finally, Chapter 4 analyzes the reasons for solar lantern usage and draws implications for solar energy cooperation from the Tanzanian case study. The results indicate that high female participation in the Solar Cow project and the will to study were the main reasons behind solar lantern usage. However, some residents did not participate willingly in the project due to the charging policy. This shows that understanding the willingness to pay is as important as understanding the demands for green energy technology is crucial to increasing the effectiveness of the project. A pre-analysis of the recipients and some form of participation compensation is required when performing development cooperation projects for green energy.Four implications can be drawn from this study. First, collaboration between East Africa and Korea is needed to improve the green energy policy environment in East Africa. Among the East African countries, Tanzania and Uganda’s institutional development is weak, while green energy related regulations and incentive policies need to be newly implemented. Institutions such as the Rural Electrification Agency and rural electrification policies have been established to provide the rural areas with electricity, but there is room for further collaboration in the actual implementation of these policies. Accordingly, cooperation on policy improvement to expand energy access and green energy adoption in rural areas of East African countries should be discussed.Second, green energy related projects could be expanded. Korea only has a limited number of energy related projects in Africa, which are mostly in the form of loans. However, when looking at the electrification strategies of international organizations and partner countries using green energy, cooperation in the green energy sector can be expected to increase in the future.Third, institutional mechanisms that promote the participation of energy companies and institutions are needed. This study suggests the expansion of financial support for companies investing in the African power market, the creation of an information sharing platform for the energy sector, and the increase of participation in the African power generation market as the main cooperation strategies.Fourth, there is a need to diversify green energy cooperation. The demand for solar energy is generally high but that is the same for wind, hydro, geothermal and other sources. The efficiency of education and health-sector related projects can be improved by supporting energy access and generation of education and health facilities. There is a need to gradually expand cooperation on clean cooking energy sources, as it is also in high demand. Most importantly, a system to support human development and equipment management is needed once a projects ends for further maintenance.Improving energy access and energy efficiency will continue to be important issues in East Africa. Support for the energy sector not only affects economic activities but also other sectors such as education and health care, and is expected to be further linked to gender inequality and support for the vulnerable. East Africa’s population in particular is larger than that of other regions in sub-Saharan Africa, and so is the demand for energy accordingly. In consideration, expanding energy cooperation between Korea and East Africa is expected to contribute to the socio-economic development of East African countries in the mid- to long-term. -
A Study on the Korean Model Law of Digital Trade Agreement
The purpose of this research is to provide necessary information to prepare a basic model law for the digital trade agreement that Korea will conclude. And more, this study analyzes the “forms and contents” of several digital tr..
Hyunho Kwon et al. Date 2023.05.26
E-trade, electronic commerceDownloadContentSummaryThe purpose of this research is to provide necessary information to prepare a basic model law for the digital trade agreement that Korea will conclude. And more, this study analyzes the “forms and contents” of several digital trade agreements concluded so far, and presents practical considerations that need to be reviewed from a legal and policy perspective when Korea has a chance to conclude digital trade agreements in the future.To this end, Chapter 2 presents specific grounds to establish the Korean digital trade agreement model at the formal or structural level. This is a formal and structural approach to consider for setting the model of digital trade agreements. To solve this problem, this study conducts a detailed review in two main aspects. First of all, the implications of the multilateral discussions on the digital trade agreement will be analyzed. Through this study, it is possible to examine the various forms or structures of digital trade agreements that appear in multilateral discussions themselves. On the other hand, what needs to be addressed in the process of forming a more realistic model is the formal aspect of digital trade agreements through bilateral, regional and plurilateral agreements or multilateral agreements. This approach will be the most realistic solution for Korea or most countries. In particular, there are various types for regulating digital trade through bilateral, regional and plurilateral agreements or multilateral agreements, such as those attached as part of FTAs or RTAs, and those concluded as independent trade agreements regardless of FTAs such as DEPA or KSDPA. Therefore, Chapter 2 presents various trade legal and policy implications, such as the meaning and characteristics of digital trade agreements concluded in different forms, and problems according to the legal perspectives of the agreement itself, which helps Korea set a model agreement.In addition, the core of Chapter 3 is the analysis of the content aspects of digital trade agreements. Here, the content aspect refers to the degree of liberalization consequently raised in the composition and content of the agreement provisions that Korea should consider when signing a digital trade agreement. In other words, this aspect is connected to the degree of liberalization of the object in the conclusion of digital trade agreement. Therefore, Chapter 3 analyzes the contents of existing digital trade agreements, examines the specific and acceptable contents and scope that should be included in digital trade agreements from Korea’s point of view, and presents the basis for determining whether it can be discussed at the level of liberalization. The research topics in Chapter 3 are basically analyzing the current situation in the digital trade and examining the results and limitations of digital trade agreements that have already been implemented in the international relations. In particular, Chapter 3 provides the meaning and limitations of the digital trade agreement model to be concluded in the future based on the analysis of the contents of digital trade agreements made at the previous bilateral and regional levels.As results of these studies, Chapter 4 of this research first evaluates existing digital trade agreements and proposes the direction of the model of digital trade agreements that Korea should maintain. In addition, as a result of this analysis, the characteristics of Korea’s digital trade agreement model are reviewed at the formal and content level, and the direction of the Korean digital trade agreement model is presented. Through this analysis, Chapter 4 classified the direction of the Korean model of digital trade agreements into the form of updating existing trade agreements, participating in open plurilateral agreements, and signing strategic digital partnership agreements, and analyzed their formal characteristics and implications for Korea. And as a result of this analysis, the model of the Korean digital trade agreement was presented by dividing it into a model based on traditional standards and a model based on the so-called ‘new standard.’Finally, Chapter 5 completes the entire research by reviewing the problems that may arise in the future for digital trade. To this end, Chapter 5 proposes factors to be considered in terms of the maintenance of the domestic legal system according to the previously proposed Korean digital trade agreement model. In addition, in connection with the definition or scope of digital trade, Chapter 5 examines the problems or characteristics raised in the process of discussing the expansion of digital trade agreements into digital partnership agreements and further into digital economic agreements. And finally, Chapter 5 briefly examines legal policy problems that may be raised from the perspective of digital transformation, that is, the future transition to an industry that can be digitized in the future. -
The US Financial Sanctions on China and Its Implications on Korea
Economic sanctions are typically imposed as coercive measures to restrict a target’s economic activities, with the aim of achieving foreign policy and national security objectives. The United States has employed many methods of e..
Wonho Yeon et al. Date 2022.12.30
economic security, Financial liberalizationDownloadContentSummaryEconomic sanctions are typically imposed as coercive measures to restrict a target’s economic activities, with the aim of achieving foreign policy and national security objectives. The United States has employed many methods of economic sanctions, such as imposing import and export limitations, withholding foreign aid and investment, seizing foreign assets, and forbidding its nationals from doing economic transactions with sanctioned individuals and companies. Financial sanctions encompass a range of measures that particularly limit the movement of funds and other forms of asset value to countries, companies, and individuals subject to sanctions. These measures have a wide-reaching impact as they can freeze assets, prohibi t or restrict financial transactions, and even disrupt the settlement of import and export activities.The utilization of economic sanctions as a geopolitical instrument has a lengthy historical background, but, the current impact and efficacy of U.S. sanctions are unparalleled. Although countries other than the United States have the authority to enforce tariffs, import and export controls, and other non-tariff barriers, they lack the ability to independently limit access to the global financial system, unlike the United States. Therefore, the secondary sanctions imposed by the United States, which limit dollar transactions, enables the United States to exert its influence on a worldwide scale through working in conjunction with other economic restrictions, such as export controls.Amidst the escalating strategic rivalry between the United States and China, the United States is broadening both the extent and substance of its financial sanctions. In the ongoing competition for technological supremacy between the United States and China, the United States can leverage its influence in the financial sector to impede China’s access to the necessary resources for the advancement of its own high-tech sectors. Furthermore, the United States has the ability to intervene in transactions occurring within the supply chain of high-tech enterprises that utilize U.S. currency, in addition to imposing restrictions on domestic U.S. companies selling components to China.Chapter 2 explores the legal foundation, governance, and enforcement procedures of U.S. financial sanctions imposed on China. It also provides an account of the present situation and future possibilities of U.S. financial sanctions against China. It concludes that U.S. financial sanctions are based on a legal foundation and are implemented through a coordinated process among Congress, the President, and key executive branch agencies. While the United States has a long history of using financial transaction sanctions to address violations of international norms, it has recently adopted financial sanctions to block the flow of funds, including equity investments in certain Chinese companies, in response to China’s technological rise and national security threats.Chapter 3 examines China’s response. In China, finance is an important industry that supports economic growth and is still one of the fastest-growing industries in the country. Chinese companies also rely on the U.S.’s advanced financial system to finance their businesses and invest abroad. However, with the U.S. utilizing sanctions as one of its tools, China has been forced to respond and prepare for external shocks to its financial industry. Chapter 3 analyzes China’s response to the recent U.S. financial sanctions, categorized into short-, medium-, and long-term strategies. It analyzes China’s short-term responses to U.S. financial sanctions in terms of its position statements and the adoption and application of laws and regulations in response to foreign sanctions; its medium-term responses in terms of standardizing overseas listings and diversifying financing sources; and its countermeasures against U.S. financial sanctions in terms of developing the renminbi international payment system and expanding capital market capacity.Chapter 4 examines the economic consequences of a protracted period of significant financial de-globalization caused by financial sanctions between the United States and China. In this context, “substantial” refers to a decline in local investments abroad and foreign investments within the country. We aimed to analyze the economic consequences of a country’s gradual shift from an open to a closed economy, where foreign capital inflows are replaced by domestic investments. Our research indicates that a reduction in trade openness has a detrimental effect on economic growth, whereas the influence of financial openness is not statistically significant. Nevertheless, if there is a rise in fragmentation within the global economy, leading to limitations on capital investment in China to specific nations, namely an increase in financial concentration, it would adversely affect economic growth. In addition, we analyzed the current level of financial interconection between the United States and China in order to assess the immediate expenses associated with an escalation of hostilities and the severance of their financial systems.Even if the introduction of financial sanctions between the U.S. and China reduces financial globalization in a de jure sense, it is difficult to say with certainty that it will reduce outward investment globally or between the two countries in a de facto sense. However, it is possible that competition in the financial sector between the U.S. and China could reach new extremes. In response to Russia’s invasion of Ukraine in 2022, Western countries such as the U.S. and EU took measures such as freezing the Russian Central Bank’s foreign exchange reserves and excluding major financial institutions and corporations from SWIFT. Under extreme conditions, such as a Chinese invasion of Taiwan, it is conceivable that the U.S. could impose such measures on China, and that China would be forced to dramatically reduce its reliance on the dollar payment system, even at the cost of significant short-term losses, and stick to the RMB international payment system.However, it is unlikely that the U.S. would want to see China accelerate the internationalization of the RMB and the internationalization of the RMB necessitates consensus among nations, rather than solely China’s endeavors. Consequently, a scenario of intense confrontation or competition in the financial sector between the United States and China is unlikely to occur. The United States is likely to choose a course of action that involves strengthening regulations on financial transactions involving specific high-tech or strategic goods. In this scenario, our government will need to devise strategies to minimize the negative impact on our industries, while our companies will need to take measures to avoid being subjected to sanctions by improving their own compliance. -
A Study on Updating Korea’s Services Trade Statistics System
This report aims to provide directions for improving Korea’s service trade statistics. Ultimately, the purpose is to enhance the understanding of Korea’s service trade and contribute to the establishment of service trade policie..
Jong Duk Kim et al. Date 2022.12.30
international trade, Industrial policyDownloadContentSummaryThis report aims to provide directions for improving Korea’s service trade statistics. Ultimately, the purpose is to enhance the understanding of Korea’s service trade and contribute to the establishment of service trade policies through improved data. To this end, the report categorizes Korea’s service trade statistics into short-, medium-, and long-term agendas based on the progress of discussions on international service trade statistics, domestic policy demand, and data availability for statistical improvement, and studies each agenda.Chapter 2 first look at the historical discussions regarding the definition of services in economics, and the definition of service supply modes stipulated in trade agreements such as the GATS. Modern service trade statistics collected on the balance of payments are compared with suggested statistics by mode of service supply under the GATS. Based on these discussions, the report presents two considerations for improvements from the perspective of services statistics construction. First, it is necessary to put an effort to converge the classification of the balance of payments to the CPC. Second, statistics by mode of supply defined in services trade agreements need to be reflected in the collection of balance of payments statistics, currently aggregated without distinction by mode of supply.Chapter 3 discusses how to convert trade statistics by service sector on the balance of payments, which is a transaction standard, into industrial standard service trade statistics such as the Korea Standard Industry Classification. The convergence to activity-based classification is helpful in setting out policy directions at the industry level, and matching with other activity-nased statistics, e.g. foreign direct investments, which are readily prepared based on the Korean standard industry classification. In Chapter 3, service trade statistics from the balance of payments are reclassified according to the Korea Standard Industry Classification. In this process of bridging and fill the gap between the two statistics, a fair amount of addition information and complementary data in each industry are required. Ultimately, in order to increase the rigor of the statistical correspondence between the international balance of payments and the standard industrial classification, it is necessary to test the consistency between them.In Chapter 4, service trade statistics by mode of supply were estimated as a medium-term improvement issue. There is a great interest in statistical estimation by mode of supply in that different mode implies distinctive impacts on services market. Recently, statistics by mode of supply for individual countries, TISMOS (Trade in Services by Mode of Supply), have been released by the WTO and OECD. However, since Korea’s statistics shown in TISMOS were estimated indirectly using estimates from some countries such as the United States and the EU. In order to initiate discussions to accurately estimate service statistics by mode of supply in Korea we conducted surveys regarding how Korean companies in services sector have traded in terms by mode of supply, focusing on Mode 1 in particular. Then, for more accurate estimation of Mode 2, most of which is accounted for by travel services, we suggest to use additional information and data from Korea’s Foreign Tourist Survey or National Travel Survey. In the case of Mode 3 services trade estimation, we discussed ways to utilize information and data such as “Overseas Direct Investment Management Analysis” provided by the Export- Import Bank of Korea for Mode 3 exports and “Foreign-invested Company Management Survey Analysis” by KOTRA.Chapter 5 discussed the concerns pertaining to classification of digital products as service products, which have recently grown in interest. Currently, discussions on the classification of intangible products in the traditional dichotomous product classification of goods and services are underway internationally. In this report, we discussed how to add another mode of supply (i.e. Mode 5) in addition to the existing four modes of services supply as an idea. However, since it is difficult to fully reflect the relationship between service providers and consumers by the introduction of Mode 5, it is possible to consider ways to adopt the digital modes proposed by Ciuriak and Ptashkina (2018) within Mode 5.In Chapter 6, two suggestions for institutional improvements were proposed. The first is related to the convergence of statistical classification on the balance of payments and service statistical classification in trade agreements, and the second is related to the collection of corporate- or individual-level data on service trade. The first issue is where international consensus is needed. Therefore, it is considered important to actively monitor the classification discussion of newly formed digital services and participate in international discussions so that our positions and opinions can be reflected in these processes of discussion. The second is regarding the policy directions for supplementing current statistics with various information and data from the broader perspective of services trade. As in most countries, Korea’s service statistics are in fact mostly from the balance of payments statistics, which are collected sporadically as needed, resulting in a lack of statistical consistency. Therefore, this report discusses the approaches for improvement of Korea’s service statistics in three directions, focusing on the Korea’s legal system adjustment, improvement of service trade statistics governance, and establishment of a comprehensive service trade statistics platform.
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