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Development Overview

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Overview of Korea’s development experience

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Development Overview
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Agricultural import liberalization

Until the early 1960s when the first Economic Development Plan began, Korea was a typical agrarian country. As the manufacturing sector grew at an explosive rate and a large number of farm laborers migrated to urban areas, the importance of agriculture diminished. In the early 1960s, agriculture generated about 40 percent of Korea’s GDP and the labor force employed in the agricultural sector accounted for 60 percent of Korea’s total working population. In 2009, the agricultural share of GDP was less than 3 percent and agricultural workers accounted for less than 7 percent of employment.

In terms of Korea’s agricultural trade policy, imports of major agricultural products were restricted to protect domestic farmers until the mid-1990s. However, despite such a policy, agricultural imports steadily increased from the early 1980s due to the shortage of domestic food supplies. In particular, the increased demand for meats, fruits, vegetable oils and processed food were mainly satisfied by imports. The expansion of the domestic livestock industry also resulted in large feed grain imports.

Full-scale import liberalization in agriculture began in the late 1980s when the Korean government began to shift its development strategies towards liberalization in investment as well as external trade. Globalization and serious trade frictions with major trading partners also forced Korea to undertake policies for the opening of agricultural markets.

This section reviews the history of Korea’s agricultural import liberalization over the last six decades, focusing on opening measures after the mid-1980s. The following sections will discuss agricultural import liberalization, Korea’s graduation from GATT Article XVIII:B, the implementation of the Uruguay Round Agreement on Agriculture (URAA), the rice negotiations in 2004 and the delay of rice tariffication, and the impact of the FTAs with major trading partners, including Chile, EFTA, ASEAN and the U.S.

Source : SaKong, Il and Koh, Youngsun, 2010. The Korean Economy Six Decades of Growth and Development. Seoul: Korea Development Institute.