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Anti-Competitive Practices as Trade Barriers in Service Markets Used by Korea and Japan

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Abstract

This study analysis shows that the anti-competitive practices in the service market of the two countries have almost identical characteristics, even though there are differences in the degree of the criticism against those barriers from their trading partner countries. These practices reflect the policy objectives of both governments to emphasize consumer protection or stability of financial institutes rather than the institutes' competitiveness or operative efficiency, somewhat different from developed western countries. Such policy objectives reflect the overall social and cultural environments of the two countries which stress stability rather than productivity or efficiency of any institute. Considering the over-all economic situations of the two countries, this result implies that the service markets are deeply affected by cultural factors as well. As viewed by international standards, the two countries' cultural backgrounds are almost the same, which makes their governments' policy objectives for their service market regulations very similar in their characteristics. In the WTO world, basically a rule-based society, the GATS's disagreement on cultural factors influencing trade in services makes the regulation of service trade by GATS inefficient and controversial among the member countries with different cultural and social backgrounds and circumstances. Complementary provisions reflecting the cultural differences among the member countries are expected to be incorporated into the GATS in the near future.

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