This research proposes ways to create new import policies and analyzes the economic effects of import liberalization on Korean industry in terms of import liberalization measures implemented since 1978.
Until the open-door policy of Korea was enacted, the most important factor when considering import liberalization was domestic economy shock. Until now, open-door policy was enacted only in industries that were competitive or in which investments were made. Since then, instead of considering national competitiveness, the government is putting an emphasis on open-door policy itself, and opening up industries which have not been a part of the open-door policy. However, as the government postponed the liberalization of imports in some areas where the overall degree of export specialization was low or for industries that play a comparatively important role in the economy, it appears that the most prominent factors in deciding whether or not a country should advance liberalization of import are minimizing shock and contributing to the country’s trade balance.
Most of the import liberalization plans between the late 1970s to mid-1980s were beneficial, since productivity continuously improved while market penetration remained stable. However, this research points out the limits of such an analysis, since non-tariff barriers still exist and the risk of sudden increase in imports was minimized; this was believed to be the standard. Moreover, import liberalization was implemented when Korea was experiencing a trade deficit.
It is difficult to say that there are positive effects of opening the market, since the macroeconomic conditions are trending towards import inducement, while Korea is currently facing increasing demand for reducing non-tariff barriers. We are starting to have a discussion about opening other industries such as the Korean agro-industry and the service industry in the future. Therefore, we should be more careful when deciding whether or not to implement open-door policies including import liberalization.
수입자유화의 경제적 효과분석(The economic impacts of trade liberalization on imports)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KIET; KDI School|