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Policy Reference
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The Evaluation of the Integrating Process of the EAEU and the Economic Cooperation Strategy between Korea and EAEU
1. Evaluation of the integration process of the EAEUThe results of the integration process of the EAEU are as follows: first, the EAEU has created an institutional foundation as an economic integrator. Second, the EAEU has enacted..
Chang Soo Lee et al. Date 2021.05.26
Economic integration, Economic cooperationContent닫기Summary닫기1. Evaluation of the integration process of the EAEUThe results of the integration process of the EAEU are as follows: first, the EAEU has created an institutional foundation as an economic integrator. Second, the EAEU has enacted new tariff laws and laid the foundation for creating a common market in finance, electricity, petroleum and petroleum products, gas, and transportation services. Third, the effect of the integration of EAEU began to emerge as GDP and trade volume increased since 2017 gradually. Fourth, the EAEU has signed free trade agreements or trade and economic treaties with several non-member countries. Notwithstanding these achievements, the limitations of the EAEU are as follows: first, the EAEU has structural limitations in functioning as a trans-national economic integrator. Second, due to the EAEU’s low level of tariff harmonization, it remains in a “limited customs union,” and the complete single market of the EAEU has not yet been visible. Third, the limitations in Russia’s leadership have weakened the drive for the integration of the EAEU. Fourth, the protective features of the EAEU result in poor performance in economic integration.Considering these achievements and limitations of EAEU, the prospects for developing the integration process of the EAEU will be as follows: first, it is unlikely that the EAEU will be dissolved, but it is difficult for the EAEU to achieve a high level of economic integration. If the common market is fully operational, the government procurements could be activated, and macroeconomic stability could be maintained, and regional trade could be further promoted. Third, to strengthen the macroeconomic potential, it would be required of the enlargement of EU with securing new member states. South Korea is pushing for a “New Northern Policy” to expand economic cooperation with the former Soviet countries. Therefore, the EAEU is believed to become a partner in developing and diversifying trade, and creating new growth engines for Korea.2. Strategy and measures for Korea-EAEU economic cooperation1) Korea-EAEU Economic Cooperation StrategyThis report proposes a private and market-driven strategy as the economic cooperation strategy between Korea and EAEU. It suggests identifying and supporting the industrial cooperation-focused areas in the current market, selecting and supporting future-oriented industrial cooperation, and promoting Korea-EAEU FTA.2) Cooperation plan in areas focused on industrial cooperation in the current marketKorea’s major export industries are already showing results in the market, including the EAEU vertical division (minerals, coke, oil, nuclear fuel, metals, etc.) and industries imported from other regions and consumed as domestic demand in both regions. In other words, market-led and private-led trade cooperation structures and systems are working, so they were selected as the focus areas for industrial cooperation in Chapter 3.The measures to strengthen industrial cooperation in these industrial groups are as follows: first, from the perspective of intergovernmental cooperation, the government should continue to work together to address the constraints of trade potential in both regions and institutionalize communication systems. Second, it is suggested to make efforts to reduce tariffs on Korea’s imports of EAEU and EAEU’s imports of Korea. Third, it is recommended to implement projects to transfer export capabilities of EAEU countries, support projects to revitalize trade sources such as customs and strengthen market economy capabilities by utilizing existing ODA programs.3) Future-oriented industrial cooperation areas and cooperation measuresEAEU countries are currently facing the challenges of growing their economies through industrialization and fostering a digital economy and new industries in line with changes in the Fourth Industrial Revolution age. Korea, a country with already achieved industrialization, needs to strengthen industrial cooperation with EAEU countries for a cooperative partnership to grow small and medium-sized enterprises facing limitations in the domestic market.Besides, fostering the digital economy at the overall level of the EAEU is a critical task. By strengthening cooperation with leading countries within the EAEU, such as Russia, it is necessary to build a digital economy infrastructure and establish a collaborative industrial ecosystem in various fields in self-driving cars, artificial intelligence(AI), and the cloud.In the recent Covid 19 pandemic, cooperation in the medical and health sectors has become more critical than ever. Considering the high possibility of developing the medical system, medicine, and medical device markets in EAEU countries, the outlook for Korean medical institutions’ management consulting, consignment management, and medical device and drug exports is bright.4) Strategies and cooperation measures for the Korea-EAEU FTAConsidering the environment of the two countries’ industries, it is necessary to push for the Korea-EAEU FTA in a direction that benefits each other through phased discussions.According to a CGE study, the effect of the FTA will slightly increase Korea’s GDP, but the impact of each industry is different. If the Korea-EAEU FTA goes into effect, the damage to the Korean grain industry is the biggest, and it is expected to have a negative effect on the metal, electricity, electronics, and machinery industries, especially among the manufacturing sectors. On the other hand, it is expected to positively affect the meat, processed foods, and transportation equipment industries. As a result of analyzing the extent of the FTA’s impact by dividing the service industry into wholesale and retail, transportation, health and welfare, and business services, the service industry’s production is expected to increase in general. Among EAEU countries, Russia and Kyrgyzstan’s GDP increases, while Kazakhstan, Belarus, and Armenia’s GDP decrease. Industrial production in the manufacturing and service industries of EAEU countries is expected to decline, and precise cooperation measures in these areas need to be sought in future FTA or economic cooperation.Taken together, the two should seek ways to cooperate through the FTA, as the Korea-EAEU FTA has no unilaterally favorable results for only one country. In particular, cooperative relations between the two countries should be formed to boost technical support, new technology cooperation projects, and ODA in the highly competitive transportation equipment industry and minimize damage to particular industries in Korea. -
ASEAN Economic Integration on Services: An Analysis of Economic Impacts and Implications
ASEAN has been pursuing economic integration on services since 1995, reducing trade restrictions on services to ASEAN member states through the ASEAN Framework Agreement on Services (AFAS) packages commitments. ASEAN ..
Meeryung La et al. Date 2020.12.30
Economic integration, Trade policy Southeast Asia OceanContent닫기Summary닫기ASEAN has been pursuing economic integration on services since 1995, reducing trade restrictions on services to ASEAN member states through the ASEAN Framework Agreement on Services (AFAS) packages commitments. ASEAN signed the ASEAN Trade in Services Agreement (ATISA) on October 2020, which includes built-in agenda to convert members’ commitments to a negative approach, replacing the AFAS 10th package. Upon this backdrop, this report aims to analyze the current status of economic integration on services among ASEAN members and the impact of such commitments on ASEAN and non-ASEAN countries.The targets of AFAS packages are summarized as follows: (i) eliminating Mode 1 and 2 restrictions, (ii) substantially eliminating market access limitations regarding Mode 3, and (iii) raising minimum ASEAN equity participation to 70%. Upon reviewing the commitments concluded in the AFAS 10th package, Myanmar, the Philippines and Viet Nam were yet to reach the thresholds, and the overall degree of openness among ASEAN member states regarding Mode 3 restrictions remained relatively low.Meanwhile, ASEAN has restricted liberalization on the movement of natural persons (Mode 4), and signed the ASEAN Agreement on Movement of Natural Persons (AAMNP) in 2012 for facilitating the movement of high-skilled labor only. According to the theoretical model used in this report, ASEAN’s approach to Mode 4 liberalization could be appropriate. This is because, if the endowment gaps among countries are large enough, factor mobility could lead to agglomeration of productions in a single large country. However, if there is a complementary relationship between the modes, ASEAN’s efforts to lower trade barriers in the services sector are not expected to be effective as long as they pursue such asymmetric liberalization among modes of supply. Therefore, it would be proper to adopt different liberalization strategies regarding Mode 4 barriers depending on whether each service sector has inter-modal substitution or complementarity.The results of the theoretical model of this report also show that non-ASEAN member countries with small economies like Korea need to secure ASEAN’s low level of Mode 1 and Mode 3 barriers in order to maintain a relative comparative advantage in the service sector over ASEAN.In Chapter 4, we examine the actual degree of openness in the ASEAN service market through the AFAS 10th package commitments and analyze its impact on ASEAN and non-ASEAN economies in the area of distributions services, which marked the highest share of investment from Korea to ASEAN. The results of the analysis show that the actual level of intra-ASEAN trade liberalization was not substantial except for the Mode 1 barrier in Indonesia and Mode 3 barrier in Malaysia. If there exist inter-modal substitution in distribution services, such reductions in Mode 1 barriers in Indonesia would increase the Mode 1 services trade from Philippines, Thailand and Viet Nam to Indonesia, but reduce the intra-ASEAN services trade of Mode 3. Also reductions in Mode 3 barriers in Malaysia would increase the Mode 3 services trade from Singapore to Malaysia, but reduce the intra-ASEAN services trade of Mode 1. On the other hand, if there is inter-modal complementarity in distribution services, reducing the Mode 1 barrier in Indonesia would not have that large an effect because of the high Mode 3 barrier in the country. However, the effect of reducing the Mode 3 barrier in Malaysia was relatively large because of the low-level Mode 1 barrier in Malaysia.The integration of the ASEAN service market presents both a challenge and opportunity for Korea as well. To enhance the economic cooperation with ASEAN in the service sector, it will be quite important to make efforts to lower ASEAN’s service trade barriers. Also necessary will be to secure access to the integrated ASEAN service market by negotiating an FTA or upgrading existing FTAs with ASEAN member states. -
Land Tenure Security, Institution and Agricultural Production: Evidence from Ethiopia and Malawi
The importance of land in the sub-Saharan Africa is necessary for survival beyond the concept as a simply real estate. However, due to factors such as land institution from colonial experience, instability in politica..
Munsu Kang et al. Date 2021.05.25
Economic development, productivity Africa Middle EastContent닫기Summary닫기The importance of land in the sub-Saharan Africa is necessary for survival beyond the concept as a simply real estate. However, due to factors such as land institution from colonial experience, instability in political systems, and rapid population growth in rural areas, land ownership in rural areas has a significant impact on agricultural production such as productivity, labor and input investment. Ethiopia and Malawi are commonly known as agricultural countries, and the global donor’s contribution to the agricultural sector is also large. However, land in Ethiopia is controlled by the state and Malawi has a land system that was mixed with British colonial law and traditional common law.Meanwhile, as the size of international development aid continues to increase, discussions continue on the effectiveness of ODA support in the agricultural sector. However, despite the importance of land tenure system in the sub-Saharan Africa, there is still a lack of discussion on how land ownership can affect the effectiveness of the agricultural ODA. In this study, we investigate on how the effectiveness of agricultural support can be heterogeneous by the difference of land ownership. In particular, to discuss the effectiveness of the ODA in the agricultural sector, we focus on how land ownership and tenure security affect the effectiveness of government support, focusing on agricultural support projects.Chapter 2 looked at the agricultural policies of Ethiopia and Malawi and the status of aid received from OECD/DAC countries. Both the Ethiopian and Malawi governments operate supporting policies for farmers. Ethiopia is more focused on supporting vulnerable groups for social development, whereas Malawi is more focused on supporting fertilizers and seeds through agricultural policies. However, Ethiopia also has a support policy for maize farmers by providing fertilizer support projects. In the case of ODA in agriculture, the United States and the United Kingdom are the key donors to each country. However for the case of South Korea, the proportion of ODA for agricultural sector is high for the agricultural and rural development in Ethiopia, while the size of the ODA against Malawi is very small.Chapter 3 describes the background of the establishment of land tenure system in Ethiopia and Malawi, and their impact on agricultural production and gender issues. Section 1 focuses on the background of each country’s land tenure. The government of Ethiopia nationalized rural lands and redistributed to every people. Ethiopia’s nationalization of land and government-led redistribution policies have led to a sharp decrease in land holdings per capita, and agricultural productivity has declined due to continued reluctant investment by farmers due to instability in land ownership. Malawi, where most of the land is redistributed under common law, local leaders (or chiefs) decides whom to distribute. Accordingly, migrants from other regions often cannot purchase or transfer the land and falls in the poverty. In addition, both the Ethiopian and Malawian governments established land policies that were disadvantageous to women. Both governments put women at a relative disadvantage in the land ownership, such as inheritance, gift, and sale of land. In addition, women’s land tenure security is relatively weak, which also works as a constraint on economic activities.Chapter 4 analyzes the effects of land ownership on farm activities and productivity of farms supported by the government. We use the World Bank LSMS-ISA panel data and generaged two different land ownership variables: land acquisition type and land transfer rights. According to the analysis, even with the government support, there is a difference in labor input investment and agricultural productivity between groups with different land ownership. In particular, land transfer rights rather than the land acquisition type has more impact on farmers’ decision-making and productivity, which was discussed by Besley (1995). In addition, even though women are in a discriminatory position, ownership of the land itself does not significantly affect the productivity or labor supply decisions among government-supported farms. However, in the case of farms that have not received government support, further research is expected in the future as the difference between female and male household owners is correlated with the tenure security.Finally, Chapter 5 provides policy implications for the importance of the land tenure security in analyzing the effectiveness of ODA projects in the agricultural sector using the results of Chapter 4. In particular, conducting additional surveys on land ownership, women’s decision-making rights, of project beneficiaries in recipient countries might be needed by conducting surveys to avoid the fall mistaken policies by using the average effectiveness. It can be also emphasized that the importance of understanding the characteristics of developing countries’ systems such as land tenure system and decision-making process. -
I. Introduction China has been able to escape from the Covid-19 outbreak relatively quickly compared to other countries. Nevertheless, it still remains greatly influenced by the Covid-19 pandemic across its politics, e..
Jaichul Heo et al Date 2020.12.31
Financial cooperation, Chinese politics ChinaContent닫기Summary닫기I. IntroductionChina has been able to escape from the Covid-19 outbreak relatively quickly compared to other countries. Nevertheless, it still remains greatly influenced by the Covid-19 pandemic across its politics, economy, society, culture, and other areas, which has led to various changes throughout China.Therefore, this study comprehensively examined the impact of the Covid-19 outbreak on various aspects of Chinese politics, economy, society, and culture. And in response to these changes in Chinese society, the study explores new strategies toward China in the post-Covid-19 era.II. Changes by Field in China1. Domestic politicsIn the early days of the Covid-19 outbreak, there was controversy over whether China’s party-state system was shaken and there was a problem in leadership, but the analysis found no evidence to support this. On the contrary, the current party-state system showed adaptability to the changed circum-stance, and a “gathering effect” also appeared. However, it is necessary to observe further developments about whether this phenomenon can be sustained in the medium and long term.2. Foreign relationsThe U.S. and China have been engaged in a fierce battle of no concessions over responsibility for the Covid-19 pandemic, and while the conflict and competition are expanding further, the space for negotiations is shrinking. The Covid-19 pandemic has confirmed that the global leadership of powerful countries has weakened significantly and the international community is entering its own path of survival. In response to non-traditional security threats such as Covid-19, China is pushing for global public health governance with emphasis on multilateralism, and taking advantage of the void in global leadership left by the U.S. to become a global leader in the Covid-19 response.3. Economy and tradeAs the Chinese economy entered the New Normal (新常態) era, which means an era of medium-speed growth beginning around 2012, the Chinese government has been pushing for structural reforms on the supply side to resolve various structural contradictions. However, with the trade friction between the United States and China intensifying in 2018 and the Covid-19 pandemic in 2020, such restructuring is showing signs of delay. As a coun-termeasure against Covid-19 and the deepening U.S.-China conflict, the Chinese government is preparing a medium- and long-term development strategy for the Post-Covid, concentrated on a “dual-circulation” development strategy, which is at the core of the 14th Five Year Plan (2021-25).Along with these changes and impacts on the domestic economy, the Covid-19 pandemic has also had a profound impact on China’s foreign trade circumstances. In particular, as the global pandemic raised the need for reorganization of the GVC, which had previously been formed around China, Chinese companies are also seeking ways to respond by establishing a production base in ASEAN.Meanwhile, the effects and reactions of Covid-19 on China’s economy varied by region. In order to respond to the Covid-19 pandemic, it is actively transitioning toward the domestic market in regions that are highly dependent on exports, and is pushing to expand regional industries and supply chains to cope with the reorganization of GVC.4. Society and cultureThe Chinese government’s centralized quarantine and economic recovery response was successful in stabilizing the Covid-19 infection crisis relatively quickly compared to other countries, but at the same time weakened the social safety net and expanded labor instability. In addition, social discussions on the balance between personal privacy and quarantine measures are expected in the future due to the frequent restrictions placed on the privacy and rights of the Chinese people in the process of conducting massive epidemiological investigations. On the other hand, the prospect was raised at home and abroad that the media environment in China will change due to the Covid-19 outbreak. But as a result, media control was strengthened and justified in the quarantine process instead of an increase in freedom of speech.At the same time, changes in China’s dietary culture as a whole have been seen since the Covid-19 outbreak, with the culture of using individual serving portions (分餐制) and serving chopsticks (公筷) spreading in China, and social movements to reduce food waste. Covid-19 is also attracting the older generations to Internet culture, and has brought changes in the social interaction and communication methods of Chinese people, representative examples being the so-called “bullet comments” (弹幕) and “cloud” culture (云互动).III. ImplicationsIn line with these changes, we need to prepare for four aspects of uncertainty.The first is preparation for the uncertainty arising from the reorganization of the international order after Covid-19. Second is preparation for the uncertainty that will result from the deepening and expanding of U.S.-China competition. The third is preparation for new threats that will emerge during the reorganization of the GVC after Covid-19. And fourth, we must prepare for the internal medium- and long-term risks that China revealed in the Covid-19 recovery process.Meanwhile, as China is expected to seek changes in its national development strategy to cope with the various impacts of the Covid-19 outbreak, we need to analyze and utilize China’s strategic changes. To this end, first, it is necessary to prepare in advance to utilize China’s strategic changes, which will be included in the 14th Five Year Plan (2021-25) of China. Second, it is necessary to ex-pand cooperation with China in the digital economy sector, which will lead the growth of the Chinese economy after Covid-19. Third, it is necessary to actively utilize changes in demand according to China’s new culture and consumption patterns when establishing business strategies toward China. Fourth, efforts should be strengthened to explore China’s domestic market, especially in areas where the transition of industries into domestic demand is expected to proceed quickly after Covid-19. Fifth, it is necessary to devise ways to use China’s newly formed Internet culture after Covid-19 as a channel for public diplomacy and economic diplomacy with China.At the same time, as competition between the U.S. and China in the Asian region is expected to intensify, it is necessary to prepare a plan to simultaneously promote cooperation on the Asian strategy of the two countries. China also has a strategic goal of responding to the trend of deSinicization through economic integration in East Asia and achieving GVC stability. Therefore, while reviewing the meaning of economic integration in the Asia-Pacific and East Asia region, we should play a leading role for the current discussion on economic integration to help expanding market opening of the participating countries and creating a fair and free trade environment. In particular, as the Democratic Party’s Biden won the presidential election, there is a possibility that the United States will return to the CPTPP, so we must come up with a regional economic integration strategy in case the United States will change its economic integration strategy in East Asia. -
The Reform of the WTO’s Appellate Body and Its Implications on Strategic Trade Policies
Paper studies the reform of the WTO Appellate Body (AB) and the implications in regard to the WTO members’ trade policies and their strategic use of the WTO Dispute Settlement Process (DSP). Based on an analysis of t..
Sangjun Yea and Junhyun Eom Date 2020.12.30
Multilateral negotiations, International politicsContent닫기SummaryPaper studies the reform of the WTO Appellate Body (AB) and the implications in regard to the WTO members’ trade policies and their strategic use of the WTO Dispute Settlement Process (DSP). Based on an analysis of the 2020 USTR report on the WTO AB, we characterize two main criticisms leveled by the US against rulings of the WTO AB ‒ namely, the WTO AB’s activist role in interpreting WTO agreements, and the standard applied when reviewing issues of the respondent’s domestic law. We employ a game theoretic model which extends Maggi and Staiger (2011) by allowing the WTO AB to make a strategic decision maximizing the number of proper rulings based on a noisy signal, which is correlated with the trading countries’ joint payoffs. We find that as the signal the WTO AB receives is noisier, disputing parties have more incentives to engage in the DSP. Also, by assuming that reviewing domestic law negatively affects the respondent’s payoff when the country fails to receive a favorable ruling at the AB, we show that the respondent will become reluctant to go through the DSP even if its chance of winning in the arbitration process is not low. Arguably, the reform of the WTO AB leads member countries to choose more opportunistic trade policies while less number of disputes arise via the DSP. We review a number of WTO disputes cases to support our findings. Applying our analysis to the ongoing U.S. - Safeguard Measure on PV Products and U.S. - Safeguard Measure on Washers disputes cases, we conclude that arguing parties’ litigation responses may crucially depend on how the (reformed) WTO AB will deal with the issue of the “unforeseen developments” requirement in GATT 1994 - Article XIX.닫기 -
Putin’s Russia in the Context of Identity
Explaining a country in the context of national identity provides us with a deeper and more comprehensive view. Understanding the background of why Russia has gone through such a process and has been forced to act lik..
Sang Nam Park et al. Date 2021.04.28
Economic relations, Economic cooperation Russia EurasiaContent닫기Summary닫기Explaining a country in the context of national identity provides us with a deeper and more comprehensive view. Understanding the background of why Russia has gone through such a process and has been forced to act like that through the past history will be of great help in finding mutually helpful cooperation measures at the point where the other person needs it.This study was written for the purpose of examining the process and characteristics of the formation of Russian identity, and to understand the political, economic, and social culture of modern Russia.Modern Russia’s politics, economy, and culture are the result of pursuing their own tradition and identity while absorbing the nutrients of Eastern and Western civilization. Russia, a multiracial and multicultural country, is a country with geographic, civilized, and demographic conditions in which it is not possible to clearly describe their identities. So Russia has as complex elements as its vast territory and natural environment.Modern Russia’s politics, economy, and culture are the result of pursuing their own tradition and identity while absorbing the nutrients of Eastern and Western civilization. Russia, a multi-ethnical and multi-cultural country, is a country with geographic, civilized, and demographic conditions in which it is not possible to clearly describe their identities. So Russia has as complex elements as its vast territory and natural environment.In fact, identity is not fixed and immutable. The Russian identity was also constantly reconstructed and interpreted in various ways, depending on the times, social changes, and the intentions of the ruling powers. The coexistence of conflicting elements, one of the characteristics of Russian identity, is also a result of looking at their inner selves differently. The Russians also sought their own direction in Europe and sought it from Eurasian elements as well. These two perspectives were differentiated into various perspectives through conflict and interaction with each other.Russian intellectuals say that within themselves there is a heterogeneous element of ascetic Russian Orthodox beliefs and intense secular desires. Russia clearly shows this duality through its national identity. Russia’s identity turmoil is also the result of geopolitical conditions that were located on the outskirts or in the middle of civilization. Even in the midst of such confusion, the Orthodox church, which has become a customary religion, has a profound influence on politics, economy, and social culture as well as the formation of Russian identity.Geographically, Russia encompasses both extremes of the Eurasian continent due to its vast territories facing the East and the West, as well as the Pacific and Atlantic Oceans.Putin wants to take advantage of these geographic conditions to emerge as a great power. To this end, it argues on the reinforcement of authoritarianism and nationalism necessary for efficient state management. Putin’s anti-Western policy reflects a sense of crisis that the introduction of Western-style democracy could jeopardize the security of their regime.In summary, the characteristics of Russian political culture are strong centralism and vertical power structure, authoritarianism, dual attitude of envy and rejection toward Europe, pursuit of tradition and vigilance against external forces, minority rule and its domination, state capitalism with nationalism, and imperialism orientation.The lens of national identity is also needed to find out the characteristics of the Russian economy, which is different from that of the West. Russia’s identity, symbolized by nationalism, led to state capitalism in the field of economy as well. In the context of identity, the characteristics of the Russian economy can be explained as a state-led economy, a privileged economy by minority rule, communism, and the tendency to pursue independent economic spheres. State capitalism, in which political logic takes precedence over market, can be interpreted as originating from Russian authoritarianism and nationalist political culture. The nationalization policy, the privileged economy of minority power elites, and the gap between the rich and the poor are in the same vein. The Nobles and permanent residents of the Russian Empire, the nomenclature of the Soviet Union, Oligarhi of the Yeltsin period, and Siloviki of the Putin period form the lineage of the privileged class. In terms of foreign economic policy, Russia is simultaneously promoting openness to the outside world and forming an independent economic block.Russia’s nationalistic nature has greatly influenced the legislative system and its culture of conflict resolution. The Orthodox and authoritarian legal system received from the Byzantine Empire in East Rome is inherited to modern Russia. The Putin-era legal culture, called the “dictatorship of the law,” is now more authoritarian than any other country.The dispute resolution culture in Russia shows the characteristics of coexistence of the rule by informal relationship of human and rule of law. Dispute resolution methods that rely on informal human relations are governed by personal connections and acquaintances, and may appear as a behavior of taking private interests by bypassing rules and laws. Although the practice of relying on personal connections is still in common use, it is evaluated that the method of solving problems through laws and institutions is gradually becoming established. However, even in the Putin era, dispute resolution is still being criticized for being driven by power or money. It is not the rule of law, but the arbitrary rule of the privileged class using state power.In conclusion, Orthodox beliefs and Byzantine authoritarian cultural heritages, geographical and civilized conditions in the middle between Asia and Europe, and hostility to external forces formed by exposure to numerous invasions had a significant impact on Russian identity. In addition, multicultural and multi-ethnical factors following the expansion of territory and internal and external policies of the ruling forces, which have changed by era, are combined to form modern Russia’s political, economic, and social culture.The national identity formed in this way provides a consistent and useful context for explaining not only politics, but also the economy and the culture of dispute resolution. Therefore, it is difficult to properly understand this huge country unless an understanding of the national identity embodied in Russian characteristics is prerequisite. Russia’s history, which has created a common denominator of national identity, can be explained as “coexistence of difference and uniformity” amid the vast geographic conditions and the mixture of heterogeneous elements in which multi-ethnic people live. This is also the result of the strong state power trying to dissolve the heterogeneous elements of multi-ethnic and multi-civilization into a unified national identity. Therefore, in order to comprehensively understand the various aspects of Russia, the context of national identity is necessary.The Chapter 1 - Introduction (Sang-Nam Park) and Chapter 2 ( Sang- Jun Park and Sang-Hyeon Kim) deals with the theoretical background of identity and the process of forming a Russian identity. The Chapter 3 (Sang-Nam Park) explains the close relationship between Russian identity and politics. Chapter 4 (Yeon-Kwan Cho) analyzed the Russian economy in relation to its identity. Chapter 5 (Young-Ok Kim) introduces the culture of conflict resolution in terms of the authoritarian legal culture of Russia. The Chapter 6 Conclusion ( Sang- Nam Park) contains a comprehensive interpretation and perspective on Russian identity, politics, economy, and legal culture. The last Chapter 7(Sang-Nam Park, Dong-Ho Yeom, and Young-Ok Kim) presented policy implications for cooperation between Korea and Russia were presented in a large framework. -
New High Standard for Environmental and Labour Provisions in FTAs: Law and Economic Perspectives
Trade-related issues such as market access, and tariff elimination or reduction have been the main concerns of free trade agreements or “FTAs” since the 2000s. But more of the recent FTAs appear to focus on non-trad..
Cheon-Kee Lee et al. Date 2020.12.30
Trade policy, Environmental policyContent닫기Summary닫기Trade-related issues such as market access, and tariff elimination or reduction have been the main concerns of free trade agreements or “FTAs” since the 2000s. But more of the recent FTAs appear to focus on non-trade concerns such as protection of the environment and workers. A typical example is the FTA between Korea and the European Union (hereinafter referred to as “Korea-EU FTA”), which was signed in 2009 and provisionally taken into force in 2011. Ever since Korea-EU FTA the European Union has included a chapter on “Trade and Sustainable Development” or “TSD” in its FTAs to extensively provide for environment and labour obligations. Further, it is noteworthy that the United States and the European Union have resorted to dispute settlement and enforcement mechanisms within their FTAs to ensure their trade partners effectively implement environment and labour obligations at the domestic level. For instance, on December 17, 2018, the European Commission formally requested a consultation to Korea under Korea-EU FTA on the grounds that the Korean government had not shown sufficient efforts in ratifying the remaining four of the eight ILO core conventions and thus acted inconsistently with the TSD Chapter of the same FTA. This is the first case that the European Union has ever initiated a dispute settlement procedure under a TSD Chapter. The Panel of Experts was composed on December 30, 2019, and it recently published the final report on January 25th, 2021.Against this background this study aims to understand recent trends in the use of environmental and labour provisions in trade agreements and provide meaningful guidance to the Korean government in conducting negotiations for new FTAs or for amendments of its previous FTAs. It discusses possible approaches the Korean government may be able to take when conducting future FTA (re-)negotiations, and responding to environment or labour claims posed by FTA partners in the future. In particular this study focuses on the aspect of “enforceability” of environment and labour obligations in FTAs.In Chapter 2 this study explores the question of linkage between trade and environmental issues, and identifies main components and key features of environmental provisions under the FTAs of the United States, the European Union, and Korea. It further examines environmental chapters of the CPTPP and the USMCA. One of the main features the U.S. FTAs have is their strong enforcement mechanism, which was first introduced in NAAEC and was virtually repeated with minor variations in the following FTAs. In the case of the European Union, since Korea-EU FTA a TSD chapter has been included in every FTA it negotiates and concludes. As opposed to the U.S. approach which is based on enforceability and sanctions, EU FTAs tend to focus on consultation and dialogue between FTA partners. Consultation and the “Panel of Experts” under TSD chapters, a provision on non-application of an FTA Dispute Settlement mechanism to a TSD chapter, and establishment of Domestic Advisory Groups (“DAGs”) and Civil Society Forum (“CSF”) are examples of such tendency.In Chapter 3 this study discusses the question of linkage between trade and labour issues, and identifies key features of labour provisions under FTAs of the U.S., the EU, and Korea. It further examines labour chapters of CPTPP, USMCA, and CETA. One of the main features the US FTAs have is their strong enforcement mechanism, which was first introduced in NAALC and repeated only with minor changes in the following FTAs. In case of the EU, FTA labour provisions were first introduced in the Association Agreement with Israel and a comprehensive labour chapter was later adopted for the first time in EU-CARIFORUM EPA. Under the TSD Chapter of Korea-EU FTA, labour provisions regarding “continued and sustained efforts” for ratification of ILO core conventions; upholding of labour protection; the TSD Committee; DAG; CSF; and a TSD dispute settlement mechanism were included, and these components have been included only with minor variations in the following FTAs.In Chapter 4, this study sheds light on the background and impacts of strengthened environmental and labour provisions in FTAs. It focuses on three aspects including (ⅰ) inherent limitations of the multilateral trading system, (ⅱ) the need for levelling the playing field, and (ⅲ) domestic politics. Theoretically, when a trade agreement is linked with new issues of non-trade character, it can broaden the scope of negotiation, and can lead to higher chances of concluding an agreement with increased social welfare. This study also confirms such results empirically: it finds that introduction of environmental and dispute settlement provisions in FTAs shows a tendency of increasing trade between FTA partners and that developing countries, by accepting enhanced environmental obligations, can increase their trade. Further, strengthened environmental and labour provisions in FTAs lead to reduction of greenhouse gas emission and a positive contribution to an index or indicators on the level of workers' right protection.Chapter 5 sheds light on the possibility of the United States’ and particularly the European Union’s further strengthening environmental and labour standards in their FTAs, and of using their FTAs as a leverage for addressing climate change issue pursuant to the Paris Agreement. It also intends to predict possible impacts on Korea and draw meaningful policy implications regarding Korea’s legal and policy responses to such changes. In particular the European Union is slowly but surely moving towards ensuring its FTA partners’ compliance of environmental and labour standards and is considering a multiple of options to improve the enforceability of its trade agreements. The Korean government needs to pay close attention to any future development of the EU’s recently created position of Chief Trade Enforcement Officer (CTEO) and the proposed amendment of the Trade Enforcement Regulation, particularly in relation to the recently announced report by the Group of Experts under Korea-EU FTA regarding Korea’s non-ratification of some of core ILO conventions.Lastly, as the United States and the European Union have emphasized on the need of ‘effective’ implementation of their FTAs, a rather cautious approach would be desirable in preparing and introducing provisions on effective domestic implementation of international environmental and labour standards (e.g. MEAs, ILO conventions) in future FTAs (re-)negotiations. This study further suggests that a domestic monitoring system be prepared and/or otherwise improved in order to ensure Korea’s effective (and “convincing”) implementation of environmental and labour obligations in order to avoid any unnecessary tensions with its FTA partners. -
Korea as an OECD DAC Member: 10-Year Achievementsand Way Forward
The purpose of this study is to present long-term policy directions for development cooperation through an evaluation of Korea’s ODA performance over the past 10 years. Korea’s achievements in the area of official d..
Jione Jung et al. Date 2020.12.30
Content닫기Summary닫기The purpose of this study is to present long-term policy directions for development cooperation through an evaluation of Korea’s ODA performance over the past 10 years. Korea’s achievements in the area of official development assistance since joining the OECD Development Assistance Committee were comprehensively reviewed from the perspective of implementing major strategies and policies. The main contents of each chapter are summarized as follows.Chapter 2 examines the quantitative results of development cooperation in Korea. From 2009 to 2018, Korea’s ODA average annual growth rate was about 7%, ranking first among DAC member countries. However, the ratio of ODA to GNI is 0.16% as of 2019, which is less than the DAC average of 0.3%, and it is expected that it will be difficult to achieve the established target of 0.2% in 2020.Chapter 3 conducted a comprehensive review of the major development cooperation strategies and policies established by the Korean government. The government’s “Mid-Term Strategy for Development Cooperation” needs to be improved so that it can clearly provide the vision, principles, and basis for decision-making to be followed by several ODA-implementing agencies. Strategic documents for each priority partnership country, sector, or issue should go beyond their declarative purpose and increase their practical use.Chapter 4 examines the current status of the ODA evaluation system in Korea. Korea’s ODA performance management system has achieved significant achievements in establishing a legal and institutional foundation. However, at the level of the ODA-implementing agency, it was found that additional efforts were needed to expand the impact of the ODA projects, such as securing the necessary evaluation budget and organization, and strengthening expertise and the data collection system.Finally, Chapter 5 presents the results of an online survey on the Korean ODA policy from major policy officers in partner countries. The survey shows that resolving Korea’s segmented system in the field and promoting communication between the two governments are the most urgent areas for Korea to improve. This report argues that policy efforts are needed to ensure that Korean ODA fully considers the development goals and priorities of the recipient country. -
A Study on Unilateral Trade Policy and International Trade Structure
This study analyzes the widespread diffusion of unilateral trade policies and change in trade structures. Chapter 2 examines the trend in unilateral trade policies, the economic and trade uncertainty they generate, an..
Moonhee Cho et al. Date 2020.12.30
Trade structure, Trade policyContent닫기Summary닫기This study analyzes the widespread diffusion of unilateral trade policies and change in trade structures. Chapter 2 examines the trend in unilateral trade policies, the economic and trade uncertainty they generate, and the direct and indirect evidences of their diffusion. Unilateral trade policies are diverse in measures and unilaterally imposed on partner countries, hence increasing uncertainty in the international trade environment. In the case of the United States, after the Trade Preference Extension Act of 2015 came into force, anti-dumping and countervailing duties were actively used and higher rates were growingly imposed. Unilateral trade policies are spreading internationally. Non-tariff measures including anti-dumping, countervailing measures, SPS and TBT measures are increasing. Moreover, both developing and developed countries are adopting trade-disruptive measures and these are rapidly increasing. Uncertainty grows with the diffusion of unilateral trade policies, in particular the average value of the World Uncertainty Index almost increased to four-fivefold compared to 1990.Chapter 3 discusses changes in trade structures and factors reshaping the global value chains (GVCs). It also examines changes in import market shares by countries and industries, and it estimates the trade diversion effect due to unilateral trade policies. International trade increased rapidly with the rise of free trade agreements and the expansion of GVCs and so on, but has slowed downs after the global financial crisis. Between 1995 and 2007, the trade growth rate was on average 9% per year; after the financial crisis, it slowed to around 4% per year. This trend can also be found among developed and developing countries. Intermediate goods also grew by 19% on average per year from 2002 to 2007, and this growth rate decreased to 2% on average per year from 2010 to 2019. GVCs are being reorganized as developing countries become consumer markets, the technology gap between developed and developing countries diminishes and the development of digital technology decreases developing countries’ labor cost competitiveness. Section 2 of the chapter investigates changes in import market shares by industry for North America (United States and Canada), China, ASEAN and India, Europe and Central and South America between 2015 and 2019. First, the change in import market shares for the United States and China clearly reflects trade disputes between the two. China’s market share in the North American import market decreased across all sectors, whereas ASEAN and India’s share increased across all sectors excluding mining. However, China still accounts for a large portion of North America’s market in manufacturing sectors including electronics. Second, North America’s share in China’s import market decreased across all sectors. In particular, its share decreased around 12% in the agriculture, forestry and fisheries sector, around 10% in the vehicles sector and around 5% in the steel, nonferrous metals sector. Section 3 takes into account the results of the previous sector and analyzes the trade diversion effect due to the US-China trade conflict. Most of the literature focuses on the decrease in imports from China due to the United States’ imposition of tariff measures. This study pays attention to import diversions from China to other countries. If the trade diversion effect is big, it is hard to expect improvement in United States’ trade balance, and the effect of protecting domestic industries and creating jobs would be weak. According to our analysis, the trade diversion effect in the United States’ import market is statistically significant, especially for intermediate goods.Chapter 4 investigates the changes in trade structure due to unilateral trade policies by constructing a theoretical model. GVC structure is incorporated in the trade model to trace the ripple effect of unilateral trade policies. The Trade Uncertainty Index is used as a proxy for unilateral trade policies and its tariff equivalent is estimated. This is then used as an exogenous shock for the change in trade cost. How the rise in trade costs due to the proliferation of unilateral trade policies affects the trade structure of the world, regions and that between countries is examined. The change in consumption goods, intermediate goods, value-added export, GVC indices is then presented. If trade cost rises due to shocks from the United States, the share of total exports and intermediate exports out of the world’s total production both decrease. Most of the decrease can be attributed to the change in total and intermediate exports of the three North American countries (United States, Mexico, Canada). Meanwhile, the share of value-added exports out of total exports increases. This is due to the increase of North American countries’ share of value-added exports unlike that of other countries such as Korea, China and Japan, European countries and so on. GVC indices also changed for those three countries with the United States’ GVC participation rate showing particular increase. The global shock due to unilateral trade policies is stronger than shocks from the United States and has different ramifications. All regions experience a decrease in their share of consumption goods and intermediate goods’ exports and the majority of countries and regions see a drop in value-added exports’ share. In conclusion, GVC participation rate of the world declines. This means that the proliferation of unilateral trade policies works against the decades-long trend of GVC expansion, and it intensifies the rearrangement of the GVCs, negatively affecting total, intermediate and value-added export structures.The last chapter presents policy implications based on the analyses from former chapters. As the Covid-19 pandemic drags on, the global economy will not easily recover in a short period of time. It is estimated that the intensification of uncertainties in the trade environment due to trade conflicts between China and the United States, and the proliferation of unilateral trade measures will have important effects on the change in trade structures, including the reorganization of the GVCs. Followings are some suggestions the Korean government and firms could consider: (1) strengthen the nation’s ability to respond to GVC rearrangements, (2) improve capacity to generate value-added in exports, (3) continue efforts to negotiate free trade agreements and improve their contents, (4) participate actively in multilateral trade negotiations and strengthen collaboration with middle trade powers, (5) strengthen monitoring of the global trading system, and (6) continue efforts to improve competitiveness at the firm level. -
European E-Mobility Focusing on Automobile Industry
This study analyzes e-mobility policies of the European Union (EU) and its major member states. Through the analysis the study provides policy implications for the Korean government in promoting eco-friendly automobil..
Hyun Jean Lee et al. Date 2021.04.01
Industrial policy EuropeContent닫기Summary닫기This study analyzes e-mobility policies of the European Union (EU) and its major member states. Through the analysis the study provides policy implications for the Korean government in promoting eco-friendly automobiles, and strategic insights for Korean companies aiming to access the EU market.
The automobile industry of the EU faces multiple challenges today. Aiming to achieve climate neutrality by 2050, the EU will have to reduce greenhouse gas emissions of cars by expanding the use of renewable energy, while maintaining the industry’s competitiveness. Currently, the EU remains comparatively weak in the market for eco-friendly automobiles. The share of European brands in the world’s eco-friendly car market is only 12%. Moreover, Europe is lagging behind Northeast Asian countries, including South Korea, in battery packs and hydrogen fuel cells technology and production. Upon this background, the EU is endeavoring to support the eco-friendly automobile industry to reduce overseas dependence on core components, and to expand the distribution of eco-friendly cars.
On the EU level, the EU Commission is playing a pivotal role in laying the basis for the eco-friendly automobile industry. It has announced the European Green Deal and adopted the New Industrial Strategy for Europe. A roadmap has been presented for supporting the eco-friendly automotive industry through EU-level strategies in the areas of batteries, hydrogen, and e-mobility. Meanwhile, cooperative alliances are being formed in the battery sector, including the European Battery Alliance (EBA), BatteRIes Europe, a technology innovation platform, and the Battery 2030+ initiative. The European Clean Hydrogen Alliance has been formed to promote hydrogen fuel technology. In addition, the EU protects and supports the regional e-mobility industry using indirect methods of regulation, such as emission regulation, waste regulation, and the establishment of standards. Financial support for research innovation is being provided through the Horizon Europe and InnovFin initiatives, and through mobilization of the European Strategic Investment Fund (EFSI), while infrastructure investment is actively being carried out through the Connecting Europe Facility (CEF).
On the EU member state level, Germany, France, Sweden, and the four Visegrad states (Poland, Hungary, Czech Republic and Slovakia) were selected for case studies, on the basis of their importance in the EU’s automobile industry. Germany, France, and Sweden are all actively using subsidies and tax regimes to expand the distribution of eco-friendly cars. Germany has introduced a new e-mobility law to facilitate the administrative process of using eco-friendly cars. Germany's eco-friendly automobile industry support policy incorporates suggestions from the industrial sector, while providing support for research and production of battery cells, as well as R&D projects in hydrogen technology. In the case of France, it is notable that the government, as a major shareholder, is actively participating in the management of major manufacturers with a view to protecting jobs and fostering the eco-friendly automobile industry. Sweden has the highest sales volume of eco-friendly cars in Europe thanks to government policies to encourage consumption. The V4 countries are gaining importance as emerging powers of the European automobile industry, with a large number of global companies entering their markets, both as primary and secondary suppliers.
Through the analyses, the study draws three main implications. First, it is important to actively participate in the process of establishing standards through technical cooperation with Europe. For Korean companies it is important to work closely with EU companies and institutions to reflect their opinions when setting battery technology standards. In addition, Korean companies, academia, and the government should actively participate in discussions on expanding the use of hydrogen technology in Europe, so that well-advanced Korean hydrogen technology can penetrate into the newly-formed EU market.
Second, expanding the supply of eco-friendly cars in Korea through improvement of the subsidy system can be considered. Policy makers could consider expanding the scope of subsidies to include leased or used eco-friendly vehicles, to the extent of available budget levels. Another option to consider would be modifying the eligibility criteria to incentivize transition to eco-friendly cars, rather than focusing on scrappage programs. In addition, it is necessary to consider ways to incorporate CO2 emission into the calculation of automobile taxes.
Finally, further cooperation with the V4 countries is necessary to improve access to the EU market. To make more efficient use of the advantageous position already formed in the V4, Korea needs to implement a step-by-step cooperative framework with the V4 for the development of future mobility. Possible directions would include establishing joint R&D centers for developing electric vehicles and batteries, or forming a global consortium in the field of hydrogen cars and charging facilities.