To Improve the Use of FTA: Lessons learned from Korea

Although Korea has been successful in concluding free trade agreements (FTAs), it has faced difficulties in increasing FTA utilisation by small and medium enterprises. Since there has been substantial progress in building institutional infrastructure as part of the Korean government’s active policy of FTA utilisation assistance, FTA utilisation ratios are as high as those of advanced countries. Several policy implications can be drawn from Korea’s experience in assisting businesses with FTA utilisation. (i) One of the most urgent and important tasks in assisting FTA utilisation is to identify the barriers that prevent companies from utilising FTAs. Critical barriers may differ from country to country. (ii) Coordination amongst national agencies is critical in increasing the efficiency of the infrastructure assisting FTA utilisation. (iii) Governments should promote FTAs with large economies, which are expected to bring big economic gains. (iv) Authorities of trade and industry should understand the importance of the quality of FTAs. (v) FTA member countries should take advantage of various levels of committees institutionalised in FTAs.