The purpose of this research is to analyze the pattern of export competitiveness for environmental goods between Korea, China, and Japan, examine the current status of the intra-regional trade including the tariff and non-tariff measures, and set policy recommendations based on the research findings. As for environmental goods, we use the APEC list of 54 environmental goods agreed in the 2012 APEC leaders’ meeting in Vladivostok, Russia.
To better assess the pattern of export competitiveness for the environmental goods between the three countries, we applied the concept of the unit value and discriminated between price and quality competition based on Aiginger (1997, 1998, 2000). As a complementary, we additionally applied the concept of product differentiation from Abd-El-Rahman (1991), Greenaway, Hine and Milner (1994), Fontagne and Freudenberg (1997).
The main findings of this research are as follows. First, trade in environmental goods has increased significantly over the past decade worldwide. In particular, the share of Korea, China, and Japan in the trade in environmental goods is substantial and the growth rate of the intra-regional trade among the three countries came out higher than the three countries’ trade with other countries. Second, the share of the top 10 major export environmental goods dominates the total trade in the environmental goods industry, and many major export products overlaps among the three countries. Third, Japanese products showed comparative advantage in quality competition while the Korean and Chinese products had more comparative advantage in price competition. The status of the comparative advantage for each item showed to be closely connected with the trade balance. Fourth, the tariff rate is relatively higher in Korea and China while most Japanese products were subject to zero. However, considering the non-tariff measures such as the technical barriers to trade, China and Japan seem to have more protective trade measures compared to Korea.
Based on the main findings, we suggest the following policy recommendations. First, Korea needs to develop a strategic approach per item when negotiating for further trade liberalization in environmental goods since the characteristics of intra-regional trade, pattern of export competitiveness, and tariff and non-tariff measures in the environmental goods industry are distinct from each other by items. Second, Korean government needs to focus more on the non-tariff measures. However, there are difficulties to discover the non-tariff measures due to asymmetric information problems and cultural difference among countries. Accordingly, the Korean government could initiate a separate trilateral joint research project and a committee to identify and deal with the issues of non-tariff measures. Third, concerning the characteristics of intra-regional trade and the patterns of comparative advantages in environmental goods, Korea needs to diversify its strategic export products and upgrade its quality competitiveness. Korean products, compared to that of Japan’s, are more price dependent with relatively high tariff rate. Examining patterns of trade between Korea and China, the comparative disadvantage in the price competition is widening. The intra-regional trade in environmental goods is concentrated in few specific items. Since APEC member countries agreed to cut tariffs to five percent or less by 2015 for on the 54 environmental goods, the Korean government should minimize the negative impact from further tariff cuts by making more efforts to increase the quality competitiveness of environmental goods and diversify the support towards the industry.
- 한, 중, 일 3국 환경상품 교역의 특성(The changing pattern of environmental goods export competitiveness among Korea-China-Japan)
- 방호경; 나승권; 이보람
한, 중, 일 3국 환경상품 교역의 특성(The changing pattern of environmental goods export competitiveness among Korea-China-Japan)
경쟁력 패턴분석을 중심으로(An overview and assessment)
|Series Title; No||연구자료 / 13-05|
|Subject Country||China(Asia and Pacific)
Japan(Asia and Pacific)
South Korea(Asia and Pacific)
|Subject||Economy < Trade
Territorial Development < Environment