FTA의 경제적 효과추정 방법론 개선에 관한 연구 (A Study on Methodologies Measuring Economic Impacts of FTAs)

175 Pages Posted: 13 May 2014

See all articles by Young Gui Kim

Young Gui Kim

Korea Institute for International Economic Policy

Chankwon Bae

Korea Institute for International Economic Policy

Hyeyoon Keum

Korea Institute for International Economic Policy

Date Written: December 31, 2013

Abstract

Korean Abstract: 본 연구는 FTA의 구성요소인 상품 및 서비스 교역과 투자 자유화 효과를 구분하여 그 효과를 분석하기 위한 방법론을 제시하는 데 그 목적이 있다. 이러한 연구를 통해 FTA 체결 상대국에 따라 보다 중요하게 협상해야 할 분야를 식별하는 데 도움을 얻을 수 있을 뿐만 아니라 그간 우리가 추진해오던 포괄적인 FTA의 경제적 효과를 분석함으로써 그 추진 필요성에 대한 논리적 근거를 제시할 수 있을 것으로 기대된다.

FTA의 경제적 효과를 추정하기 위해 크게 상품 및 서비스 교역과 제조업 및 서비스업에 대한 투자로 나누어 접근하고자 한다. 상품 및 서비스 교역에 대해서는 관세 이외의 장벽이라는 점에서 비관세 장벽이라는 표현을 사용하였다. 따라서 본 연구에서의 비관세장벽은 서비스 교역에 따른 장벽을 포함하는 개념이다. 투자와 관련해서 존재하는 장벽은 투자장벽으로 지칭하였으며, 이를 농업, 제조업, 서비스업으로 세분화하지는 않았다. 다만 연구에 사용되는 모형의 한계 등을 감안하여 연구의 범위를 교역에서는 양자간 비관세장벽 감축, 투자에서는 일국의 투자장벽 감축으로 제한하고자 한다. 즉 교역에서는 FTA를 통한 특혜적 시장접근과 관련하여 비관세 장벽감축을, 투자에서는 투자관련 여건 개선으로 인해 FTA 상대국뿐 아니라 제3국으로부터의 투자유입을 고려한 투자장벽 감축을 살펴보고자 한다.

English Abstract: This study develops a methodology to assess the potential economic impact of liberalizing FDI as well as trade in goods and services using a computable general equilibrium model. By doing so, it is meant to help find supportive reasons for an FTA and establish proper strategies for the FTA negotiations.

Chapter 2 measures non-tariff barriers (NTB) taking the Novy (2010)’s approach and estimates how much the NTBs can be reduced through an FTA. According to Novy (2010), total trade costs can be divided into three parts: tariffs, transportation, and the rest. The NTBs are measured by the rest of the total trade costs. It turns out that the costs are induced much higher by NTBs than tariffs. For example, the tariff rate on imported electronics is only 1.87% while the tariff equivalent of their non-tariff barriers reaches 42.01% on average. As a consequence, it is expected that the impact of reducing the NTBs through an FTA would be substantially great. The size of NTBs that can be reduced by an FTA is obtained from estimating a gravity model. The estimation shows that an FTA’s effect associated with NTBs is biggest in the automotive industry, followed by chemistry, rubbers and plastics, steel, and food processing.

Chapter 3 calculates a country’s barriers to foreign investment by adopting Gormsen (2010)’s method, and reviews previous studies to explore the impact of FTA on FDI. It is revealed that the U.S., Germany, and U.K have a relatively lower FDI barrier than Korea, China, and Japan. According to previous literature, an FTA would increase FDI between member countries by 27-57%. The measures for FDI barriers are transformed into risk premia as exogenous shocks for the CGE model. Then, it is determined how much the risk premia should be reduced through an FTA based on the relationship between FTA and FDI shown in the previous studies.

Chapter 4 models the Korea’s existing four FTAs, which are the agreements with ASEAN, India, EU, and the U.S., in the recursively-dynamic GTAP framework in order to compare the potential effects on real GDP growth of reductions in tariffs and non-tariffs, and FDI through the FTAs. The FDI scenarios are modeled only for the FTAs with EU and the U.S. as the main sources of FDI. The results of the simulations indicate that the impact of non-tariff reductions would be greater in all the FTAs except the Korea-U.S. FTA, compared to the impact of tariff reductions as expected. The effects of the tariff and non-tariff reductions of the Korea-U.S. FTA would be similar to each other, understandably staying at the lowest level among the FTAs. However, in the Korea’s two major FTAs the potential economic impact of reducing FDI barriers are assessed less than expected. It is estimated that the Korea-U.S. FTA would increase real national GDP only by 0.22-0.24% in the short run. For the Korea-EU FTA it is ranged from 0.09% to 0.178%, which is substantially smaller than the impact of tariff and non-tariff reductions through the FTA.

Note: Downloadable document is in Korean.

Keywords: Free trade agreement, Economic Impacts FTA, Non-tariff barriers (NTB), Computable general equilibrium model

Suggested Citation

Kim, Young Gui and Bae, Chankwon and Keum, Hyeyoon, FTA의 경제적 효과추정 방법론 개선에 관한 연구 (A Study on Methodologies Measuring Economic Impacts of FTAs) (December 31, 2013). KIEP Research Paper No. Policy Analysis-13-05. Available at SSRN: https://ssrn.com/abstract=2436301 or http://dx.doi.org/10.2139/ssrn.2436301

Young Gui Kim (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Chankwon Bae

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Hyeyoon Keum

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

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