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Journal of Economic Integration 2010 December;25(4) :783-817.
DOI: https://doi.org/10.11130/jei.2010.25.4.783
Some New Insights into the Effects of the EU-South Korea Free Trade Area: The Role of Non Tariff Barriers

Yvan Decreux Chris Milner Nicolas Péridy 

CEPII, Paris
University of Nottingham, GEP
Université du Sud Toulon-Var, LEAD
Copyright ©2010 Journal of Economic Integration
ABSTRACT

The present study proposes an updated and extended quantitative assessment of the EU-South Korea FTA, through a new version of MIRAGE CGE model. Several distinctive contributions are offered. Firstly, the quantitative assessment takes into account non-tariff barriers (NTBs) as well as tariffs. Second, it considers trade liberalization of goods, services as well as FDI (establishment). A third contribution is that simulations of policy changes are closely aligned with the actual agreement for each industry and service category. Finally, this article relies on recent techniques for calculating the tariff equivalents of NTBs following Kee et al. (2009). The main findings show that the EU may increase trade performance in several industries (chemicals, machinery, other manufactured and food products) as well as in specific services to a lesser extent (business, insurance and transport services). On the other hand, Korea takes advantage of the agreement for specific manufactured products (textiles, leather/clothing, cars and other transport equipment).

JEL Classification: F15

Keywords: Free Trade Area | EU | Korea | CGE Models
 
REFERENCE
1. Anderson J. and E. van Wincoop (2004), Trade Costs, Journal of Economic Literature, 42(3), pp. 691-751.
2. Baughman, L. And J. Francois (2009), Failure to Implement the US-Korea Free Trade Agreement: The Cost for American Workers and Compagnies, US-Korea Business Council http://www.uschamber.com/NR/rdonlyres/ejyp7lxtnmxyjbsbmymhens5oi35ay2wnr77sevx6tt4q3sfrsk7dijx6excatatit22erv6c6xo63drezuvonjskog/0911_fta_korea.pdf
3. Blot, C. and M. Cochar (2008), L'énigme des exportations revisitée: Que faut-il retenir des données de panel?, Revue de L'OFCE, 106, pp. 67-100.
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