본 보고서는 기존의 연구 분석에서 상대적으로 소외되어 왔지만, 최근 일련의 FTA 추진을 통해 그 시의성과 중요성이 강조되고 있는 수입 장벽의 제거를 통한 개방이 우리 경제에 미치는 영향과, 우리 경제의 제도적 정비에 대한 주제들을 주로 다룬다. 개방을 지향하는 최근의 노력은 또한 단순히 재화의 원활한 거래뿐 아니라, 서비스는 물론이고 자본과 노동 등 생산요소의 이동성을 제고하기 위한 다양한 정책적 노력을 포괄하고 있다. 재화, 서비스, 생산요소의 국경 간 거래를 저해하는 각종 관습적ㆍ제도적 장애의 제거뿐 아니라, 국경 내에서의 이동성에 대한 보장, 그리고 내국의 재화, 서비스, 생산요소 등에 비해 차별적으로 대우받지 않도록 국경 내의 관습과 제도를 개선하는 문제가 최근 무역협상의 주된 안건으로 떠오르고 있다. 본 보고서에서는 필요한 경우 직간접적으로 이러한 주제를 다루기는 하지만, 재화의 수입으로부터 경제가 받는 효과에 대해서는 주로 제조업에 치중하여 분석을 수행한다. 이는 여러 가지 제약, 특히 신뢰성 있고 연속성이 높은 자료가 주로 제조업 분야에 집중되어 있기 때문이다.

본 보고서는 모두 4부로 이루어져 있다. 각 부에 속한 대부분의 독립적 연구들은 각각, 수입자유화의 효과에 대해 상반된 견해(즉, 긍정적인 견해와 부정적인 견해)가 존재하는 이슈들에 대해, 그 견해들을 인지하고, 객관적인 분석을 통해 결론을 도출하려는 노력을 하고 있다. 제Ⅰ부는 네 개의 연구로 이루어져 있으며, 각각 본 보고서 전체에 대한 서론으로서 개방이 갖는 의미와 경제 전체에 미치는 일반적 영향, 수입자유화가 제조업 사업체의 성장에 미친 영향, 생산성에 미친 영향 그리고 임금불평등에 미친 영향을 다룬다.

제Ⅱ부에서는 두 개의 연구가 수입자유화의 진전으로 인해 발생하는 무역조정지원 문제를 다룬다. 제5장은 수입자유화로 인한 피해계층에 대한 지원제도를 주로 다루고, 제6장은 제5장의 무역조정지원제도 논의를 발전시켜, 국제규범과의 합치성과 효율성에 대해 논한다.

제Ⅲ부는 제Ⅱ부의 제5장, 제6장과 수입자유화에 대한 ‘제도정비’라는 점에서 연결된다. 그러나 무역으로 인한 ‘피해’에 대한 구제나 갈등해소가 아닌, 경제활동의 가장 중요한 요소인 자본과 노동의 글로벌 스탠더드와 우리의 제도적 정비에 대해 분석한다는 점에서 뚜렷한 차이가 난다. 노동에 대한 제7장, 자본에 대한 제8장에 이어, 제9장은 그 중요성에도 불구하고 ‘무역’과 ‘개방’이라는 이슈에 가려 FTA 추진과정에서 조명을 많이 받지 못한 환율제도에 대해, FTA라는 맥락 안에서 간단히 문제점을 제기하고 논한다.

제Ⅳ부에서는 세 개의 연구가 향후 FTA 추진 시 참고할 사항과 시사점을 제시한다. 특히 제10장은 FTA 체결 당사국들의 내부 상황과 협상과정에 걸리는 시간의 관계 등을 분석한다. 제11장은 도하 라운드가 진전되지 않는 상황에서 개발도상국들이 취해야 하는 대안을 분석하고, 제12장에서는 좀더 초점을 좁혀, 우리가 고려하여야 하는 향후의 개방추진전략에 대해 논한다.

1. Introduction

Export-oriented development strategy after the 1960s, mitigation on import in the mid-1960s, import liberalization in the mid- 1980s, continuous encouragement of economic liberalization in the 1990s, entry to the WTO and OECD, and simultaneous and multiple pursuit of FTA negotiations in the 2000s. These are the trade policies that show Korea has made gradual efforts targeting import revitalization and liberalization.

However, the reason that KOR-US FTA is regarded as an event of discontinuous openness and that heated discussions on its pros and cons is highly likely due to the significance of the US economy to the world as well as to the Korean economy and the worries as to potential damage brought by the increase in import.

This report analyzes the structural influence that openness would bring to the Korean economy through eliminating import barriers, and provides policy suggestions on institutional streamlining and future openness strategy necessary for improving the positive effect of openness.

Chapter 1 of Part 1 explains the justification of openness and its main issues. Chapter 2 and 3 analyze the effect of import liberalization in two aspects of corporation’s external growth and productivity changes. Chapter 4 of Part 2 discusses income inequalities that trade liberalization is claimed to bring or will probably bring. In addition, Chapter 5 and 6 deal with the problems of inevitable winners and losers of overall income inequality, even though the situation does not become aggravated, and further necessary policy approaches are suggested to mitigate social conflicts and to maximize the effect of openness. Part 3 goes deeper to examine the system maintenance necessary in the openness era. Chapter 7 and 8 suggest policy implications on how to deal with the global standard for labor and how to streamline institutions of the financial industry in this trend of openness. Chapter 9 analyzes foreign exchange issues that are often easily overlooked in FTA or WTO trade liberalization, but are most likely to bring serious impact on the economy. Part 4 discusses the political economy of openness and the future openness. Chapter 10 analyzes the relation between the recently increasing FTA conclusions and the political situation of Korea or partner countries. Chapter 11 questions what would be an appropriate strategy for openness amid the stagnant DDA Round and brings possible answers. Lastly, Chapter 12 details suggestions of general strategies provided in Chapter 11, finds its implication on the Korean economy, and provides appropriate strategy.


2. Major Discussions on Liberalization and KOR-US FTA

The recent trade liberalization and openness policies of Korea where KOR-US FTA is at the heart appear to pay significant attention to mitigation or elimination of import barriers as much as to external expansion of overseas market. This is because new issues emerge as main agendas, such as productivity improvement and economic system upgrade through introduction of advanced institution.

There have been no sufficient comprehensive studies made on the effect of import on the Korean economy due to a growthoriented strategy that had ruled the trade and growth policies for the past 40 years since the 1960s and due to the relatively low pace of import liberalization. Not only that, opinions against it has been sporadic and discontinuous. Although limited to a small number of partner countries of FTA with Korea, some efforts have been started to give privileges such as eliminating barriers on tariff and nontariff items, and as it proceeds the focus was on what damages the openness would bring to the Korean economy. Considering that this is a timely issue, this study has been relatively alienated from proceeding analyses, but it mainly deals with the impact that openness through eliminating import barriers would bring and the status of preparedness of the Korean economy.

Recent efforts of promoting openness include not only simple and smooth trade of goods but also various policy efforts to improve the portability of production factors, such as services, capital, and labor. Now, the main focus of trade negotiations is on the issues to improve customs and institutions in order to remove various obstacles that undermine cross-border trade of goods, services, and production factors, as well as to secure portability within the border, and not to discriminate from domestic goods, services, and production factors. The study mostly uses data of the manufacturing industry for its quantitative analysis of economic effect from importing goods, but also discusses finance, labor, and trade adjustment assistance, when necessary. This is because supporting those who suffer the most from the changes brought on by openness in the capital and labor markets, which serve as industrial infrastructure, are most significant policy agenda relating to openness. In addition, the study summarizes strategic points to promote more comprehensive openness and provides policy suggestions.


3. Import Expansion and Growth of Domestic Businesses: Focusing on Factor Intensity

This study examines the degree of impact brought on by import competition from China on the Korean economy which lies in between the stages of developing to advanced economy and under the areas of capital and skill intensive, if Korea is following the footsteps of advanced countries such as Japan or the US. The main analysis results are as follows.

Overall, the capital and skill-intensive companies in Korea have grown relatively faster in the manufacturing sector, which means that there is a transition going on in the industry from simple labor-intensive sector to capital-and skill-intensive sector. Amid this transition, the import competition from China is found to clearly bring adverse effect on the growth of companies. This fact is similar to the preceding studies stating that the US companies were negatively affected by the import competition from low-income countries, so the result itself is not odd. But, this study shows that the adverse impact brought by the import competition from China on the growth of companies is more apparent in the capital-intensive sectors.

Besides, there is no clear evidence found that within the industry with the same import competition from China, skill-intensive companies have grown faster. And, this result is totally contradictory to the US research result that the adverse impact caused by the import competition from low-income countries on the growth of companies tends to be smaller, when the companies are more capital- and skill-intensive. In order to answer the question concerning the reason for such inconsistent pattern found in Korea, this study suggests one possible reason that the imports from China does not mainly consist of simple labor-intensive items, and rather the import of middle skill-intensive goods is growing fast. In order to back this explanation, this study points out that in the case of the manufacturing of other optical instruments, spectacle, and photographic equipment, the import growth of photographic equipment and other optical instruments was much higher than that of the spectacle during the period of 1995 and 2000. Then, this study adds that it is difficult to find a concrete evidence to support the capital- and skillintensive sector gaining comparative advantage in the capital and skill intensive sectors, which advanced countries are considered to have comparative advantage. In other words, the production growth of a company in an industry with high import competition from Japan at one point is found to have a relatively lower growth after a certain point of time.

In particular, when a company is capital intensive, its growth rate shows more poor performance. It is also observed that the production growth of a company in an industry with high import competition from the US tends to be relatively high, but within the industry with the same import competition, the capital-or skill-intensive companies have grown slowly.

Comprehensively, the empirical analysis of this study interprets that under environmental changes of growing pressure in import competition from China, Korea, undergoing transition into a country with relatively sufficient capital and skilled labor, is possibly facing difficulties in the process of materializing growth of companies in the sectors where traditional advanced countries have comparative advantage.


4. Trade Policy and Productivity: Microevidence from Korean Manufacturing

Recently, a remarkable proliferation of bilateral or regional Free Trade Agreements has been witnessed all around the world. Such an accelerated pace of trade liberalization led to growing public concerns over the effects of trade liberalization on Korea's domestic economy. In particular, amid the rapid structural changes including slowdown in growth potentials, jobless growth, aging population, etc., one of the key questions that attracted much attention was whether trade liberalization will help to regain the growth momentum for the Korean economy.

It is often suggested that the removal of trade barriers leads firms to make further efforts to enhance innovative capacities and to reduce production and management inefficiency.

On the other hand, the longstanding infant industry argument suggests that free trade may be harmful, at least, at a certain stage of economic development. As such, the theoretical literature delivers disparate predictions: trade liberalization may result in either productivity gains or losses. Hence, empirical evidence on the characteristics and extents of trade liberation effects is essential in informing the debate.

In this respect, this paper empirically investigates the effects of import tariff on within-plant productivity growth in Korean manufacturing, using the detailed plant-level longitudinal data of the Korea Census of Manufacturers for the period of 1993-2003.

Our main findings are as follows: First, the productivity changes of Korean manufacturing for the period under analysis were mostly induced by within-plant productivity gains, rather than within-industry and/or between-industry resource reallocations.

Second, after controlling for firm-specific heterogeneity, the estimation results indicate that lowering tariff-barriers has a positive impact on within-plant TFP growth. We interpret the results in a way that trade liberalization through the removal of tariff and non-tariff barriers heightens the competitive pressure, which in turn creates incentives to reduce production and managerial inefficiency and to invest more on innovative activities.

Third, we also find that plant productivity growth from reducing tariff barriers is particularly conspicuous within a year after tariff changes, which implies that plants are quickly adjusting to heightened import competition. On the other hand, our results show that the trade effect on employment creation proceeds relatively slow.


5. The Effect of Import Liberalization on Income Inequality of the Manufacturing Industry

As the KOR-US FTA negotiations started in 2006, discussions on trade liberalization, in particular, the income distribution effect of import liberalization has been the most significant issue in the pros and cons of the FTA itself. This study, using data since the 1990s when trade liberalization were active, analyzed the change in real incomes of manufacturing workers, its determinants in terms of workers’ individual and industrial characteristics, and also the effect of changes in the level of import liberalization by industries on income inequality.

The study aims to (i) identify variables that affect income inequality among workers and companies, (ii) analyze the effect of import liberalization on income inequality, and (iii) provide implications on the effect of future openness on relative income and on the trade adjustment assistance policy. The result shows that income inequality among manufacturing workers since the 1990s appears to be aggravated, but that no evidence was found on import liberalization measured by tariff rates affected the trend. Even some cases were found that import liberalization mitigated income inequality.

The decreased tariff rate on import items from the US had mitigated income inequality in high-tech and medium-low-tech industries, while that on import items from China had mitigated income inequality in overall manufacturing, in particular, medium- high-tech and low-tech industries. Such result explains that regardless of the technology level of industry, import liberalization policies to date has made a faster progress in the sectors of skill-intensive goods than that in the sectors of low-skill intensive goods that replaced low-skilled workers. At the same time, it also implies that the cause of recent aggravation of income inequality is not import liberalization.

The replacement of Korea’s competing products by imported skill-intensive goods in both high-tech and low-tech industries means that Korea might not find it easy to transform into more skill-intensive sectors.

Also, the income inequality level by sectors estimated by Gini coefficient shows overall decrease, as the tariff rates on international, the US, and China decrease. The skill-biased technological progress, pointed out in preceding foreign studies as the main cause of income inequality, is found to aggravate not only income gap by occupation types in high-tech industry companies, but also the income inequality by industrial sectors. Conclusively, these results imply that as long as the skill-biased technological progress continues, income inequalities among workers in the same company and that among companies are likely to widen.


6. Streamlining TAA System and Policy Implications

This study examines the operation method and main supporting contents of the trade adjustment assistance (TAA) of Korea and the US, and reviews its status, accomplishments, and problems of the US TAA that has been under operation for the past 45 years. And, it attempts to draw implications for the Korean system. The empirical analysis of economic effect that would affect the Korean labor market and the US shows following implications.

First, factors relating to individual characteristics of workers, such as education, age, and gender, are found to be more important determinants of Korea’s unemployment rather than factors relating to trade. Second, the unemployed in industries with heightened import competition tend to be older, on average, with lower level of education, and have relatively longer working tenure.

Third, if the Korean government puts forward additional market openness, it is highly likely to be under serious pressure from monopolistic industries. Fourth, in the US’ case, it was hard to prove the logic behind TAA, which was fairness and efficiency, from experience and rather political efficiency was found to be more persuasive.

Along with this, the study reviews the current discussion trends on the US TAA. Presently, it is known that the US seriously considers expanding TAA programs mainly supported by the Democratic Party. Based on empirical analysis and document research, the study specifically produces policy suggestions on a desirable direction for Korea’s TAA from the perspectives of the nature and objective of TAA, the role of Labor Ministry, securing monitoring system, appropriateness of assistance scale, and establishment of trade infrastructure.

In Korea, the upcoming three to five years with TAA is of utmost importance, since the experience would be critical in deciding the future direction for TAA. If the newly adapted system properly operates to promote restructuring and successfully serves as an incentive for internal negotiations, the system will be settled as a new “Korean style TAA model.”But, if it fails in leading business conversions or closing of marginal SMEs and remains only as a‘ program for subsidy provision’that undermines restructuring, the system will be at risk of being eliminated, or if the system persists, it seems inevitable to transform the system into a mere program focusing on workers and not on companies.


7. Direction of Adjustment Assistance for Domestic Industry in the Era of Openness: Focusing on Accordance between Economic Efficiency and International Regulations

The trade adjustment assistance system that aims to support those who suffer from trade liberalization is one of the most critical policies relating to openness in terms of time and degree of importance. Therefore, in the process of establishment and implementation of the system requires careful consideration on consistency with international regulations.

Since operating the system itself requires a considerable amount of cost, particular caution is needed for its establishment and implementation.

This is because the benefits of trade liberalization could be undermined depending on the type of assistance and its contents.

The most important part to consider is the possibility that if applied inappropriately, the ystem could proceed to promote the continuance of industry with comparative disadvantage, hampering further advancement of industrial structure and writing off large amount of benefits from openness. On being consistent with international trade rules, following should be considered.

First, no violations should be made in the most-favored-nation treatment and national treatment. Possibly, the system also needs to provide for unspecific domestic industries. Second, the assistance should be in a form of mitigating domestic regulations, and not fiscal contribution. Subsidies for closing or conversion of business that has the least trade distortion effect and non-actionable subsidies are recommended. Third, a provision of consumer subsidy should not violate the responsibility of the most-favored-nation treatment and national treatment, and the system should not be operated to let service subsidy transfer to product subsidy. On the other hand, adjustment assistance provided as one of the services under government authority should be freely implemented.

It is very important that the above men-tioned principles and directions should be applied equally and consistently to the restructuring process of general products (including marine products) and within the service sector. As for assistance to the agricultural sector, the system should be operated in consistency with several principles mentioned above, within the limit that corresponds to the reduction responsibility of export subsidy and the reduction and concessions of domestic subsidy specified in agricultural protocol.


8. International Labor Standards and Policy Implication in the Era of Openness

With economic globalization, there have been active attempts to formulate trade rules for fair trade at the international level or bilateral agreements. In this regard, issues like labor and environment, closely related to domestic regulations, have drawn a growing attention recently. This study analyzes the international background of linkage between trade and labor standards, its history, and internationally recognized critical points of labor standards, and then summarizes the meaning of labor standard discussion addressed in the recent KOR-US FTA meetings and its policy implication.

The issue of labor standard-international trade linkage has triggered heated disputes and confrontation in the international community, involving developed and developing nations, labor groups and user groups, and protectionist tendencies and anti-globalization. As a result, an attempt for linkage under a multilateral negotiation framework such as the WTO was suspended for now without any specific agreement, and it only reconfirmed that the issue of complying with international labor standard was beyond the reach of the ILO. Therefore, in 1998, the ILO suggested four principles of freedom of association, the right of collective bargaining, elimination of forced and compulsory labor, elimination of discrimination as core labor standards (CLS) which closely relate to fundamental labor rights, and established eight related ILO basic conventions as CLS.

Controversy regarding the selection of CLS still remains, but an empirical analysis confirms that the CLS conventions can be better explained by various social indexes or regional features than economic indicators, such as income level or trade volume. This means socio-cultural features tend to have a stronger influence on the decision of convention ratification, and that CLS is clearly related to guaranteeing basic human rights, and it properly satisfies the selection criteria of CLS in that it should not directly influence trade performance.

Setting aside multilateral talks, developed nations like the US and EU both have stepped up their efforts for the linkage between labor standards and trade in the process of signing regional and bilateral agreements. The KOR-US FTA settled in April 2, 2007, suggested compliance with the international labor standards in its labor chapter.

So, the US Congress demanded a drastic strengthening of labor standards through explicitly including the duty of compliance with CLS and emphasizing the effective execution of obligation of the Labor Law. With such demands accepted by both sides, the two nations held additional talks regarding the new US trade policy, and on June 30, both signed a final agreement. There is still room for controversy as to preferential tariff on the Gaeseong Industrial Complex by recognizing the region as outward processing zone (OPZ).

As shown from KOR-US FTA, the importance of labor standard issues will grow in FTA settlements. Mandatory standards, in linkage with the ILO’s CLS, is likely to reinforce the binding obligation of ratified ILO conventions. Also, as discussions focused on trade and labor standards make a shift from international level to local level, concerned nations are expected to pursue various negotiation strategies which combine labor standards according to their conditions. In order to actively face changing situations like this, vigorous efforts are required to meet the international standard through close selfreviewof domestic laws, which do not meet the international labor standard.



9. Opening the Financial Service Industry and Improving the Regulatory Environment: Focusing on KOR-US FTA

Based on the existing accomplishment of financial sector openness, the negotiations on the financial service sector of the KOR-US FTA can be understood as a process of introducing additional liberalization measures in order to contribute in improving effectiveness of not only the financial industry but also the overall Korean economy for a long term. Since, of course, the openness of the financial industry of Korea already made a great progress, centering on ‘commercial presence,’ the negotiation pays its attention mainly to ‘cross-border transactions’and ‘new financial services.’In this regard, it appears that at the level of respective financial service industry, its direct impact by the KOR-US FTA might not be larger than that on products and other service sectors. Also, the openness of the financial service industry according to the conclusion of the KOR-US FTA is likely to influence overall economic sectors of the real economy through the channels, such as strengthened role of financial intermediation, or enhanced efficiency of resource distribution, but since there are no additional openness requiring particular attention, it seems that no large macroeconomic impact is expected.

However, given that the problems of financial regulations of Korea were brought up during the KOR-US FTA negotiation, there is a room to positively expand efforts on these issues. This is more so, when considering that the positive effect of openness of the financial service industry will result from the process of accomplishing a fundamental development of financial industry through the advancement of domestic financial regulation.

The recently negotiated agreement on the transparency of financial regulation and the improvement of predictability requires a particular attention. The agreed issues include an explicit adoption of time limit for authorization request for financial institutions, the expansion of public inquiry period and statement of its duty of obedience at the time of enactment and revising the financial supervisory regulations, and the statement of duty of obedience of public inquiry procedure at the time of administrative guidance by financial supervisory authority, including the enactment and revision of the detailed enforcement regulations of supervisory regulations.

In order to reasonably improve the regulatory actions by financial regulatory and supervisory authorities, the following needs to be premised. First, as a supportive measure, detailed stages of the public inquiry procedure need to be specified, and the policy intention of financial regulatory and supervisory authorities needs to be clearly stipulated.

By redefining the financial regulation principles of ‘documentation-oriented rule’and ‘sunset clause,’it is necessary to build up a climate under which unreasonable financial regulations will be properly managed timely by conducting a consistent analysis on the impact of financial regulations and monitoring the need to maintain respective regulations based on the analysis result.

Along with this, harmful factors that could affect the transparency and efficiency of the financial market should be eradicated preemptively by beginning a full-scale discussion on redefining the role and function of public financial institutions to come up with specific adjustment measures. It is necessary to keep in mind that accomplishing the establishment objective of public financial institutions and reorganizing their roles are the top priority agenda for advancing the financial industry already under discussion before the KOR-US FTA negotiations. Rather than being satisfied with public financial institutions being excluded from the KOR-US FTA, it is necessary to come up with specified restructuring measures for sound growth of the financial industry and to implement them. In particular, since maintaining a policy tool which already accomplished its goals would result in side effects such as market distortion, strict measures need to be taken swiftly.

Lastly, also in preparation for the consumer protection issues relating to expanded openness led by cross-border transaction in the future, consistently revising relevant regulations will contribute to the advancement of financial regulations from a long term perspective.


10. FTA and the Volatility in Foreign Exchange Rates and Trade Goods Prices: Foreign Exchange Policy Implications

Most economists agree that global trade liberalization is the best policy, but promoting trade liberalization has been stagnant. Despite the long standing objections by economists, such trends of bilateral or multilateral (regional) trade negotiations have been spreading worldwide, and even now the number keeps growing. This study deals with the possibility that these bilateral or inter-regional agreements plus foreign exchange issues could undermine the meaning and existence of WTO as well as its principle of non-discrimination doctrine.

As Professor Alan Deardorff and Professor Robert Stern points out in Chapter 11, it is doubtful that the trade diversion effect occurs and that all member nations will have their welfares improved. Therefore, it can be said that FTA negotiations, including the KORUS FTA, could be a positive step towards trade liberalization of global or with larger and more economies, but it is not appropriate to take FTA itself as an objective.

When there is a free trade agreement between two economies or economic groups, like in FTA, exchange rate is the important matter to consider. In the case of a reciprocal trade agreement among multiple countries, exchange rate instability could make terms of trade confusing, so that it is desirable to maintain a stable rate between member countries. However, even when the exchange rate among member nations seems stabilized due to fixed rate, it is not enough to prevent confusion in the price of trade goods brought on by fluctuations in major exchange rate in global market. Here is an example, a nation‘ X’concludes a reciprocal agreement with the US and adopts fixed exchange rate against the dollar. Still in this case, when the value of the dollar goes up (down) against the euro, there is plenty of evidence that the list price of trade goods in dollar will be down (up). Recent seismic changes in the exchange rate of the dollar against the euro mean that the exchange rates of major currencies are still volatile. In other words, there is a possibility that as for small countries that have made a trade agreement like this with large countries, their real interest rate of trade goods could change rapidly. There is an exchange rate system of single currency that could offset the impact of irregular fluctuations of major currencies on domestic prices of trade goods, but adopting such system is likely to result in more confusion or increase in the exchange rate risk, which could eventually reduce the degree of the nation’s incorporation into the international capital market.

An exchange rate system defined by a single major currency could not prevent irregular fluctuations of the exchange rate of major currencies that affect domestic interest rates and domestic prices of trade goods, because a single policy could not control both nominal interest rates and inflation.

Adopting separate exchange rates against each currency might be a solution for commercial management and financial trade, but it was found useless, since it was not easy to bridge the gap between two different markets with different price systems on single currency.

It is necessary to consider more realistic solution that uses some devices such as currency basket to determine the exchange rate and mitigate its volatility.


11. A Political Economic Analysis of FTAs: Temporal and Distributional Effects

While scholars have been cognizant of the potential importance of domestic constraints on how the benefits of bilateral bargaining are divided on the one hand and the efficiency loss of delay on the other, they have not integrated both insights. Our analysis studies both the efficiency and distributional impacts of such bargains theoretically and, with specific respect to FTAs, empirically.

Our two-level bargaining model highlights the multifaceted manner in which domestic constraints come into play for both efficiency and distribution. Perhaps most interestingly, for a political leader, domestic constraints are a dual edged sword. Such constraints, whatever their source, lengthen the bargaining process and, in the process, reduce the benefits of a FTA through efficiency loss.

However, distributionally, a constrained leader is better able to extract concessions from the negotiation partner. There are, of course, limits to the benefits of constraints, in that should they be too great, at least one negotiation partner will opt for the status quo without a FTA.

Our empirical analysis demonstrates that the hypotheses stemming from our model and corresponding comparative statics are consistent with data. Constraints, be they measured in terms of the weak support a leader has in the legislature or by a high level of democratization, induce delay. Legislative constraints are also associated with leaders getting a better deal in their FTA negotiations.

Hence, the Schelling conjecture receives considerable support. These theoretical and empirical results have interesting policy implications for which nations should select to negotiate a FTA. In looking at a partner, a leader will want to assess not just potential gains from trade but to analyze the domestic constraints that face the other leader. Everything else being equal, a leader wants to negotiate with a political counterpart with weak constraints.

Furthermore, there may be situations where a FTA could be profitably executed if there were no domestic constraints but where a leader is best off not even commencing negotiations at all.


12. Stalemate in Doha Round and Liberalization Strategy of Developing Nations

It is probably the developing countries that suffer most, if the multilateral trade negotiation Doha Round fails. And, developing countries as well as advanced countries are held accountable for the current stalemate in Doha Round, since the former continues to demand policy changes in the latter without bringing anything to the table themselves.

Most developing countries are reluctant in global efforts for trade liberalization, which can be seen from their participation rate in GATT, and even those few who participated, demanded special treatment. In the sense of the true meaning of openness, by stepping away from the process of bringing openness, the developing countries are dissipating the benefits that can be achieved from openness.

In order to urge advanced countries to change their policies, developing countries should accept the fact that large-scale promotion of trade liberalization at the end will be beneficial to them as well. If developing countries suggest large-scale openness in negotiations to exporters from advanced countries, it will make the exporters put pressure on their (advanced) governments to implement active policies that all participants can agree on and that are beneficial to developing countries. In this case, policy changes might be possible to reduce subsidies and tariffs on export goods of developing countries.

Considering that the basic principle of trade is to improve mutual benefits through specialization and exchange of sectors with competitive advantage, it is obvious that developing countries must take part in openness in order to obtain more.

Also, developing countries must consider the following before confronting openness. First, when selecting partners, advanced countries are in an advantageous position compared to developing countries. In this case, the main concern would be that advanced countries might get the initiative of negotiations.

Second, if accomplishing the multilateral trade liberalization fails, it might be appropriate to regard the regionalism itself as head-ing towards the proper direction. If the Doha Round fails to resume, it is necessary to consider the bilateral or regional system in a more positive way. Although this does not guarantee that everyone will benefit but bilateral or regional movement, though a bit confusing, will move the world in a positive direction.

Therefore, instead of criticizing the movement, it is necessary to make these systems evolve toward the direction of promoting openness bit by bit.

Third, it is very doubtful to believe that developing countries will gain much from negotiations where advanced countries use sectoral approach. These types of negotiations will easily proceed only in the best interest of advanced countries.

Lastly, it is appropriate for small countries and those with high tariff rates to independently lower their tariffs, regardless of the continuance of the Doha Round. The negative effect that these countries would bring to their domestic economy will be more severe than the interest of domestic beneficiaries.

This is because since the cost of maintaining the present tariff system is too large to be used as a bargaining chip to obtain concessions from partner countries in the following negotiations. Meanwhile, as for large-sized developing countries that have low or appropriate tariffs, it would be desirable for them to maintain the current tariff level and to induce heightened level of liberalization from individual or developing groups under the condition of lowering their own tariffs to the level agreed among developing countries.


13. FTA Promotion Strategy and Policy Suggestions under WTO

This study agrees with the global trend of free trade, but is concerned about the trade diversion effect being stood out instead of trade creation effect, as the number of bilateral or regional FTA increases. This is mostly due to the fact that the large effect of trade diversion only results in few changes in total trade volume and net benefit brought by the increased trade. In this regard, the study believes it necessary to re-review the economic effects and policy alternatives that the KOR-US FTA would bring.

The Korean government’s“ simultaneous and multiple FTA strategy”has the advantage of minimizing the trade diversion effect, but at the working level, the conclusion of multiple FTA could not be made simultaneously, which means problems could arise in progressively made FTA negotiations. In addition, there is a great possibility that the expected benefits from already concluded FTA could be minimized by future FTAs with other partners, and Korea, in the end, would see its FTA concluded at a lower agreement level regarding market openness.

Also, as shown in the negotiation process of the KOR-US FTA, it is necessary to improve decision-making mechanism and process that could guarantee the transparency of procedures under the circumstance of high conflict among stakeholders, including industries and government ministries.

In order to maximize the effect of FTA, it is necessary to let the effect of trade creation be larger than that of trade diversion. For this, the foreign trade strategy should be transformed in the way that the trade diversion effect could be minimized. Moreover, as for market openness which will follow swiftly in the coming 2~3 years as FTAs are being negotiated and concluded around the world, involved countries are highly likely to rapidly change their policy toward bilateralism from multilateralism. On the other hand, as the cost factors are strengthened to implement the agreements at the WTO level, it is also impossible to rule out the possibility that it will be more difficult to accept the agreed matters. Therefore, countermeasures need to be prepared, taking into account the fact that in the future problems of accordance or coincidence with the WTO system is likely to occur. Also, with respect to domestic economic policy, it is urgent to promptly establish a system of policy adjustment and conflict resolution, and the paradigm for industrial policy needs to shift its focus from nurturing nd supporting industries to establishing an environment for global competitiveness.

As a way to streamline systems for FTA implementation, the trade adjustment assistance needs to be unified. Chapter 5 and 6 already conducted in-depth analysis of this. In addition, serious consideration is also needed for complementing legal functions of market protection as a safeguard to free trade by reinforcing the functions and organization of trade commission.

제Ⅰ부 무역자유화와 우리 경제의 구조적 변화

제1장 개방, 한ㆍ미 FTA 및 주요 논점
　제1절 서 언
　제2절 무역자유화의 진전과 경제적 효과
　　1. 개방 또는 수입자유화의 진전 　
　　2. 개방의 경제적 효과에 대한 논의
　　　가. 개방의 긍정적 효과
　　　나. 개방의 부정적 효과
　제3절 개방정책으로서의 한ㆍ미 FTA
　　1. 한국경제의 현황과 중국의 도전
　　2. 한ㆍ미 FTA의 의미
　　3. 한ㆍ미 FTA의 기대 효과－개요
　　4. 한ㆍ미 FTA의 활용을 위한 노력
　　　가. 고숙련집약적 기술의 적극적 도입
　　　나. 자원의 자유로운 이동을 돕는 물적ㆍ제도적 인프라의 구축 및 개선
　　　다. 근로자 개인의 역량 강화
　　　라. 기 타
　제4절 본 보고서의 구성

제2장 수입의 확대와 국내 사업체의 성장:요소집약도를 중심으로
　제1절 서 론
　제2절 1990년대 이후 수입경쟁구조의 변화
　제3절 기본 회귀분석 결과
　　1. 회귀식
　　2. 생산증가율 회귀분석 결과
　제4절 추가적 분석 및 논의
　　1. 수입경쟁도 계수의 의미
　　2. 중국으로부터의 수입경쟁과 숙련집약적사업체의 성장
　　3. 대안적 숙련집약도 및 수입경쟁도 지표
　제5절 요약 및 결론
　<부 록> A.1. 사업체 총요소생산성 지표
　　 A.2. 사업체 자료와 무역통계

제3장 시장개방이 기업 생산성에 미치는 영향:수입관세 인하효과를 중심으로
　제1절 서 론
　제2절 개방, 생산성 및 경제성장
　　1. 시장개방과 경제성장
　　2. 시장개방을 통한 생산성 증가 경로
　　3. 개방정책의 효과성
　제3절 제조업 생산성 변화추이
　　1. 총요소생산성의 측정
　　2. 총요소생산성의 분해
　　3. 90년대 이후 제조업 생산성 변화의 주요 특징
　제4절 수입관세효과 분석
　　1. 모형 및 데이터
　　2. 분석 결과
　　　가. 수입관세율과 생산성 간의 관계
　　　나. 수입관세율과 기업 수익률 간의 관계
　　　다. 수입관세율과 고용 간의 관계
　　　라. 기업규모별 관세인하의 효과
　　　마. 수입관세 변화에 따른 기업생산성의 조정과정
　　3. 견고성 검증
　　　가. 모 형
　　　나. 분석 결과
　제5절 요약 및 시사점

제4장 수입자유화가 제조업의 임금불평등에 미친 영향
　제1절 서 론
　제2절 무역자유화와 임금불평등에 대한 분석의 틀
　　1. 이론적 분석
　　2. 실증적 연구
　　　가. 실증적 연구의 개요와 세계화
　　　나. 실증분석의 구체적인 사례: 무역자유화, 기술진보와 임금격차
　　　다. 임금격차와 제도적 요인
　　3. 본 연구의 이슈 및 분석의 개요
　　　가. 본 연구의 주요 분석 이슈 및 자료
　　　나. 무역정책과 수입 변화
　제3절 한국의 수입자유화와 제조업 임금격차
　　1. 수입자유화, 임금격차 및 노동 이동성의 관계
　　2. 수입의 자유화가 상대적 임금에 미친 영향
　　3. 수입의 자유화와 상대적 임금격차－실증분석
　제4절 수입자유화가 산업의 임금불평등도에 미친 영향
　　1. 제조업의 각 산업별 임금불평등 개요
　　2. 수입자유화가 제조업 각 산업별 임금불평등도에미친 영향
　제5절 결론 및 정책적 시사점
　　1. 본 연구 결과의 요약과 시사점
　　2. 개방과 임금불평등 논란에 대한 제언
　　3. 추후 연구에 대하여
　　<부록 1> OECD 기술수준별 산업분류－KDI 30부문－ 한국표준산업분류(제6차 개정) 대비표
　　<부록 2> 주요 변수별 설명 및 기초통계량

제Ⅱ부 개방화 시대의 산업구조 고도화를 위한 무역조정지원정책

제5장 무역조정지원제도의 정비와 정책적 시사점
　제1절 문제의 제기
　제2절 무역조정지원제도의 운영방식과 주요 지원내용
　　1. 우리나라의 무역조정지원제도
　　2. 미국의 무역조정지원제도
　제3절 미국의 TAA 운영현황과 성과 및 문제점
　　1. TAA의 운영현황
　　　가. 근로자지원 프로그램
　　　나. 기업 지원 프로그램
　　2. TAA의 운영성과와 문제점
　　　가. 근로자 지원 프로그램
　　　나. 기업지원 프로그램
　제4절 수입개방과 노동시장에 관한 경험적 증거
　　1. 무역조정지원의 제 논리
　　2. 한국의 노동시장과 수입개방
　　　가. 수입개방이 실직에 미치는 효과 분석
　　　나. 우리나라의 무역 관련 실직자의 특성
　　　다. 관세의 내생성에 관한 경험적 연구
　　3. 미국의 노동시장과 수입개방
　　　가. 수입개방이 노동시장에 미치는 영향
　　　나. 미국 무역 관련 실직자의 특성
　　　다. 미국 TAA의 효율성 검증
　　　라. 정치적 유용성에 관한 경험적 논의
　제5절 미국 TAA의 최근 논의 동향
　　1. 미국 재계의 입장변화와 주요 논의 동향
　　2. TAA 프로그램 확대를 둘러싼 논의 동향
　제6절 정책적 제언
　　1. 무역조정지원제도의 성격
　　2. 무역조정지원의 대상
　　3. 노동부 역할 최소화의 의미
　　4. 이원화된 구조의 효율성 제고 방안
　　5. 농업과 서비스의 포함
　　6. 모니터링 시스템의 확보
　　7. 무역조정 지원규모의 적정성 　
　　8. 교육프로그램의 실효성 제고방안
　　9. 성공사례 발굴과 홍보
　　10. 개방형 통상인프라의 구축
　제7절 결 론

제6장 개방에 따른 국내산업 조정지원의 방향: 경제적 효율성과국제규범 합치성의 조화방안을 중심으로
　제1절 연구의 필요성 및 목적
　제2절 그동안의 국내산업 조정지원대책 평가
　제3절 무역조정지원정책의 국제규범과의 합치성
　　1. 보조금 제도와의 합치성
　　　가. 보조금의 정의
　　　나. 특정성
　　　다. 무역왜곡효과
　　　라. 재정적 기여에 해당하지 않는 성격의 국내규제조치 형태로 지원하는 방안
　　2. 최혜국대우 의무와의 관련성
　　3. 서비스분야 보조금에 관한 국제규범
　제4절 개방에 따른 국내산업 조정 지원의 원칙과 방향
　　1. 기본 원칙과 방향
　　2. 국제통상규범과의 합치성 보장
　　　가. 최혜국대우 및 내국민대우 의무 위반이발생하지 않도록 운영
　　　나. 가능한 한 비특정적인 국내산업을 지원토록 운영
　　　다. 재정적 기여에 해당하지 않는 성격의 국내규제조치 완화 형태로 지원
　　　라. 무역왜곡효과가 적은 폐업 및 업종전환 지원목적의 보조금, 그리고 허용보조금 형태의 보조금 위주로 지급
　　　마. 서비스 보조금이 상품 보조금으로 이전되지않도록 보조금 지급
　　　바. 정부권한의 행사로 공급되는 서비스에 대한 조정지원
　제5절 요약 및 결론


제Ⅲ부 개방화 시대의 국내 제도 정비를 위한 정책적 제언

제7장 개방화 시대의 국제노동기준과 정책적 시사점
　제1절 국제노동기준 논의의 개관
　제2절 무역과 노동기준의 연계
　　1. 무역과 노동기준 연계 논의의 전개과정
　　2. 자유무역협정과 노동기준
　　　가. 미국의 사례
　　　나. EU의 사례
　제3절 국제노동기준의 정의
　　1. ILO의 핵심노동기준(CLS)
　　2. 핵심노동기준의 선택을 둘러싼 논의
　　3. 핵심노동기준의 결정요인
　제4절 한ㆍ미 FTA에서의 노동기준
　　1. 美 신통상정책과 한ㆍ미 FTA 노동조항의 수정
　　2. 한ㆍ미 FTA의 노동 장(章)
　　3. 남아 있는 쟁점 351
　제5절 맺음말

제8장 금융서비스산업의 개방과 제도적 정비:한ㆍ미 FTA를 중심으로
　제1절 서 론
　제2절 금융서비스산업 개방의 의의와 현황
　　1. 금융서비스산업 개방의 의미
　　2. 금융서비스산업 개방의 기대효과
　　3. 우리나라 금융서비스산업의 개방 현황
　　　가. 우리나라 금융서비스산업의 위치
　　　나. 우리나라 금융서비스산업의 개방 경과 및 현황
　제3절 한ㆍ미 FTA의 금융서비스분야 협상
　　1. 한ㆍ미 FTA 금융서비스 협상의 개요
　　2. 한ㆍ미 FTA 금융서비스분야 협상 주요 쟁점별논의 사항
　　　가. 국경 간 거래(cross-border trade)
　　　나. 신금융서비스(new financial services)
　　　다. 우체국보험 및 국책 금융기관
　　　라. 일시 세이프가드(safeguard)
　　　마. 금융기관 고객정보 처리 등의 해외 위탁
　　3. 주요 쟁점별 한ㆍ미 FTA 금융서비스분야협상 타결내용
　　　가. 국경 간 거래(cross-border trade)
　　　나. 신금융서비스(new financial services)
　　　다. 우체국보험 및 국책 금융기관
　　　라. 일시 세이프가드(safeguard)
　　　마. 금융기관 고객정보 처리 등의 해외 위탁
　　　바. 금융규제ㆍ감독의 투명성 관련
　　4. 한ㆍ미 FTA 금융서비스분야 협상의 효과
　　　가. 개별 금융서비스산업 차원의 효과
　　　나. 경제 전반에 미치는 효과
　　5. 한ㆍ미 FTA와 금융규제의 개선
　제4절 결 론
　<부록> 미ㆍ싱가포르 FTA 금융서비스 협정문주요 내용

제9장 자유무역협정과 환율ㆍ교역재가격의 변동성:외환정책에의 시사점
　제1절 도 입
　제2절 자유무역협정과 환율 조정
　　1. 교역재가격과 환율
　　2. 교역재가격 결정모형
　제3절 주요 통화 환율의 변동이 가져오는 효과
　제4절 작은 국가들의 실질이자율
　제5절 요약과 결론
　<부록> 환율과 교역재의 가격(Exchange Rates and Prices of Traded Goods)


제Ⅳ부 개방의 지속적 추진전략과 시사점

제10장 자유무역협정의 결정요인과 효과:정치경제학적 분석과 전략적 시사점
　제1절 서 론
　제2절 자유무역협정의 경제적 효과 및 결정요인
　　1. 자유무역협정의 경제적 효과
　　2. 자유무역협정의 현황과 결정요인
　　　가. 자유무역협정 체결 건수의 추이
　　　나. 자유무역협정의 결정요인에 대한 예비적 분석
　제3절 자유무역협상과 정치경제: 이론적 분석
　　1. 문제 제기
　　2. 선행 연구
　　3. 이론 모형
　　　가. 2단계협상모형: Two-level bargaining game
　　　나. 분석 및 결과
　　4. 실증분석을 위한 가설
　제4절 자유무역협상과 정치경제: 실증분석
　　1. 분석 자료
　　2. 분석결과
　　　가. 정치변수와 자유무역협정의 협상기간
　　　나. 정치변수와 수출증대비율의 상대적 크기
　제5절 정책적 시사점 및 결론

제11장 도하 라운드의 교착상태와 개발도상국들의개방전략
　제1절 서 론
　제2절 현재의 교착단계에 이르기까지의 과정
　제3절 개발도상국들의 무역에 대한 이해관계
　　1. 개발도상국들의 수출에 대한 공통의 이해관계
　　2. 개발도상국들 간의 경쟁과 보호무역의 정당성 여부
　　3. 개발도상국들에 대한 특혜 대우의 축소
　　4. 개발도상국들 간의 협력을 통한 편익
　제4절 협상의 구조
　　1. 과거 협상에서의 개발도상국들의 역할
　　2. ‘개발 아젠다’와 개방 참여에 대한 지원
　제5절 개발도상국들을 위한 제언
　　1. 개발도상국들과 국제무역기구(WTO) 되살리기
　　2. 무역을 위한 지원의 장려와 협력
　　3. 지역 그리고/혹은 양자간 협력의 선택
　　　가. 개발도상국들의 협정 상대국 선택
　　　나. 지역자유무역지대와 다자간 자유무역협정
　　4. 지역특화체제가 개발도상국들에게 가져다주는 편익
　　5. 개발도상국들의 일방적 자유화로 인한 편익
　제6절 결 론

제12장 WTO체제하의 FTA 추진전략과 정책제언
　제1절 WTO체제하의 FTA 추진: 현황과 문제점
　　1. FTA 추진 현황
　　2. 한ㆍ미 FTA에 따른 주요 변화
　　　가. 무관세 농업시장 개방
　　　나. 서비스시장 개방 장치 도입
　　　다. 지적재산권 보호 강화
　　3. FTA 추진전략의 개선점
　　　가. 동시다발전략의 한계
　　　나. 협상절차상 개선점
　　　다. 서비스시장 개방의 미진함
　제2절 한국의 경제구조와 FTA 추진상 제약요소
　　1. 한국의 교역 및 산업구조 특징
　　2. FTA 추진에 관한 구조적 문제점
　　　가. 관세구조상 협상의 어려움
　　　나. ‘WTO 플러스’ 협상의 현실적 제약
　제3절 FTA 추진시 전략적 고려사항
　　1. 대외 통상전략상 고려사항
　　　가. 무역전환효과 최소화
　　　나. WTO체제와의 조화
　　2. 대내 경제정책상 고려사항
　　　가. 정책조율과 갈등조정체계 구비
　　　나. 산업정책의 패러다임 변화
　제4절 FTA 추진을 위한 체제 정비와 정책 대안
　　1. 무역조정지원체계의 일원화 필요성
　　2. 무역위원회 기능 강화
　<부 록>