Aggressive regionalismy in Korea U.S. FTA: The present and future of Korea's FTA policy

Abstract

The Korea-US Free Trade Agreement (FTA) is a result of a paradigm shift from traditional regionalism, which deals mostly with customs-border issues, to 'aggressive regionalism' that codifies a whole-scale problem-solving process. A series of age-old bilateral trade disputes, such as the automobile trade imbalance, unethical business practices in pharmaceuticals and medical devices and effective protection of copyrights, were actively addressed between Korea and the United States, and permanent solutions to the problems were sought in the form of stable and binding FTA rules. New global or regional issues, such as the non-implementation of WTO panel decisions and South and North Korea's economic cooperation, were also dealt with.When negotiating future FTAs, Korea will continue to take the problem-solving approach based on this aggressive regionalism. Particular focus will be given to such sensitive issues regarding the trade remedy system, unfair business practices, sanitary and food safety and economic engagement policies towards North Korea. As Korea becomes part of more FTAs, transaction costs caused by fragmented FTAs will become an economic issue. In order to reduce the costs of the aggressive regionalism policy, Korea must adopt the advanced level of accumulation system for the rules of origin and it should endeavour to ultimately harmonize varying rules among FTAs. This strategy may start by linking to other FTAs. It is suggested that achieving such 'multilateral regionalism' should be a long-term task for Korea. © Oxford University Press 2009, All Rights Reserved.