Free Trade Agreements and Korea’s Trade Policy

Abstract

This paper examines Korea’s reaction to the proliferation of regionalism in the world and provides an evaluation of Korea’s free trade agreement (FTA) policy. Korea’s approach of starting FTAs with smaller countries reduces the potential gains from FTAs; instead priority should be placed on forming FTAs with larger trading countries. The slow pace of establishing FTAs will ultimately be a disadvantage for Korea, positioning it as a late entrant to FTAs. This paper recommends that Korea promptly ratify its FTA negotiations with Chile and expedite negotiations on further FTAs with other countries. However, Korea and its trading partners must also recognize that FTAs are second best options and must not allow regionalism undermine the importance and the success of the Doha Development Agenda.