2012047886 Dong-Joon, Yoo
1. The merit of the Korea-U.S. FTA
If tariff is removed or reduced due to the ratification of the Korea-U.S. FTA, price competitiveness of Korean products will increase, and thus help the nation to grow. As the output and export of major companies increases, minor business partners will always have a chance to generate sales. Also, for consumers, the revision of the Korea-U.S. FTA will help stabilize prices and expand the choice of goods due to import. The FTA would give Korean the opportunity to gain a foothold in the market in an advantageous position than its competitors. In addition, by expanding the market size, one can reach the maximum economic profit.
2. The demerit of the Korea-U.S. FTA
With the ratification of the Korea-U.S. Free Trade Agreement, Korea's agricultural sector is expected to be hit hard. Items expected to have a sensitive impact on our agriculture are minimized by introducing tariff and agricultural security guards or by delaying removal of duties for sensitive products.
3. The merit of the Korea-China FTA
China is not only the world`s second-largest economy but also our largest trade partner. Up until now, processing trade has accounted for a substantial proportion of Chinese trade. However, imports of China's processing trade are falling. So we should reduce the share of processed exports and expand general exports targeted at domestic demand in China. And we could expand our entry into the domestic market of China as general trade duties were lowered. Further, through the Korea-China FTA, an institutional basis can be built to protect the profits of Korean investment businesses in China. Korea-China FTA extends investment and leads to job creation.
4. The demerit of the Korea-China FTA
Like the Korea-U.S. FTA, there is a negative effect on agriculture.
Therefore, we need to prepare active measures to resolve side effects in order to effectively utilize the rapidly growing FTA with China in the world.
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