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Implications Of U.S. Free Trade Agreement With South Korea

Author

Listed:
  • Renan Zhuang

    () (Center for Agricultural Policy and Trade Studies, North Dakota State University)

  • Won W. Koo

    (Center for Agricultural Policy and Trade Studies, North Dakota State University)

Abstract

This paper examines the effects of a U.S.-Korea free trade agreement (FTA) on various sectors of the economy in the two countries using a general equilibrium model. Our analysis indicates that the increase in U.S.-Korea bilateral trade volume in recent years is through intra-industry trade of high-technology products. Under a U.S.-Korea FTA, the bilateral trade volume would increase for virtually all the sectors and the GDP and social welfare would improve for both countries. However, producers of textile products in the United States and producers of agriculture and food products in South Korea would suffer from the FTA. How to compensate those groups would be instrumental to the smooth implementation of the FTA.

Suggested Citation

  • Renan Zhuang & Won W. Koo, 2008. "Implications Of U.S. Free Trade Agreement With South Korea," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(1), pages 27-44, June.
  • Handle: RePEc:jed:journl:v:33:y:2008:i:1:p:27-44
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    More about this item

    Keywords

    Free Trade Agreement; U.S.-Korea; Trade Creation and Trade Diversion;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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