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http://interaffairs.ru
Author : G. Kostyunina
Professor at the Moscow State Institute (University) of International Relations, Ministry of Foreign Affairs of
the Russian Federation, Ambassador Extraordinary and Plenipotentiary, Candidate of Science (History)
SOUTH KOREA is one of the world's top ten ex-
porters. As of 2015, it was the world's sixth-largest ex-
porter and ninth-largest importer. That year, South
Korean products accounted for 3.2% of global exports
and for 2.6% of world imports compared with 0.85%
and 1.07% respectively in 1980. Hence the country has
played an increasing role in the international division
of labor.
BY 2000, SOUTH KOREA was one of the few mem-
bers of the World Trade Organization (WTO) to have
no RTA with any country.
In the first decade of the 21st century, South Korea embarked on a policy of moving from mul-
tilateral trade (except for trade based on its WTO and APEC membership) to regional and bi-
lateral deals. The key objectives of this policy were to boost trade with key trading partners,
minimize exceptions from the nation's trade and investment liberalization, and remove nontariff
barriers. South Korea began to use nontariff barriers as mechanisms for insurance against risks
to its economy, for making its industry more competitive, and for stimulating its economic
growth.
The country now based its trade policy on WTO principles such as nondiscrimination, most fa-
vored nation clauses, national treatment, market openness, and transparency.
South Korea set itself the goal of becoming an East Asian trade, transportation and logistical
hub based on principles of transparency and inclusiveness in the anticipation that this would
provide support for its less developed industries.
Most of South Korea's RTAs have a high utilization ratio, which was between 40% and 80% as
of 2014. For comparison's sake, in 2008 the average utilization ratio was 5%. It mainly owes its
increase to the government's trade strategy and to state support mechanisms such as compen-
sations to less developed industries and less successful companies.
It is worth pointing out South Korea's FTA with ASEAN as one of the country's RTAs with
relatively low utilization ratios.
Export orientation has been the main factor in South Korea's dynamic economic development
in the last five decades.
In proportion to its total exports, South Korea's exports to its FTA partners such as Vietnam,
EFTA and ASEAN members, Peru, Australia, and China showed the fastest growth with a clear
effect of trade creation. South Korea's exports to the United States grew by the same percentage
as its total exports, while its exports to Canada, Singapore and Chile showed increases that were
below the rise in its total exports. Summing up, different South Korean FTAs show different
degrees of trade creation. The reasons are ongoing trade liberalization and differing customs
duties for South Korean goods in importer countries. South Korea's trade record proves eco-
nomic growth stimuli used by its government to have been effective.
South Korean Policy on Regional Trade Agreements