Stakeholders’ Interest Relations in Korea’s Services Trade Liberalization: A Political Economy Analysis

This paper seeks to analyze the major factors behind why each stakeholders in the legal, health, educational and audio-visual service sectors in Korea oppose liberalization in a qualitative political economy context as well as to provide alternative strategies for further liberalization in these four service sectors. In legal services, the foreign equity ceiling of 49 per cent for joint venture law firms may be lifted as long as the present regulation against the number of FLCs in a joint venture law firm exceeding the number of Korean lawyers is maintained. In health services, as a step-by-step approach, we can first consider a system where incorporated hospitals can be established and liquidated more freely by deregulating current limitations placed on the disposal of remaining properties, while an overly distribution of dividends is restrained. In educational services, in order to deregulate limitations regarding the disposal of remaining properties, it will be necessary to enhance the transparency of management and operation of private schools. In this regard, allowing school foundations to take the form of a limited liability company could be considered, since they would then become subject to external financial audit. In audio-visual services, it will be necessary to improve monitoring and implementation of intellectual property rights as well as competition policy when considering further liberalization.