The Impact of Free Trade Agreements on Trade in Goods in the Agricultural Sector of the Republic of Korea. The KORUS FTA and the KOREU FTA

Table of Contents

1. Content

1.1 Introduction

1.2 Literature Review

1.3 Background

1.3.1 KORUS FTA

1.3.2 KOREU FTA

1.3.3 Impacts of Free Trade Agreements on Korea's Agricultural Sector

1.4 Data Description

1.4.1 Definition of Operational Variables

1.4.2 Descriptive Statistics

1.5 Empirical Model

1.5.1 Poisson Pseudo Maximum Likelihood estimator

1.5.2 Fixed Effects

1.6 Results

1.7 Conclusion

Research Objectives and Themes

The primary research objective is to examine whether the Free Trade Agreements between South Korea and the United States (KORUS FTA) and between South Korea and the European Union (KOREU FTA) have led to a statistically significant increase in the import value of specific agricultural products (meat of swine) in South Korea.

• Analysis of trade liberalization impacts on the South Korean agricultural sector.
• Application of the Poisson pseudo maximum likelihood (PPML) estimator in gravity models.
• Comparison of trade outcomes between the KORUS and KOREU agreements.
• Identification of determinants influencing agricultural trade flows using panel data.

Excerpt from the Book

Summary of Chapters

1.1 Introduction: Provides an overview of global trade liberalisation trends and South Korea’s specific position, introducing the research question regarding KORUS and KOREU FTAs.

1.2 Literature Review: Summarizes previous empirical studies concerning the effects of trade agreements on South Korea’s agricultural and meat imports.

1.3 Background: Details the historical context of South Korean trade strategy, specifically focusing on the motivations and provisions of the KORUS and KOREU FTAs.

1.4 Data Description: Explains the variables used in the regression model, including monetary values, tariff rates, and macroeconomic indicators, and presents descriptive statistics.

1.5 Empirical Model: Describes the methodology, specifically justifying the use of the Poisson pseudo maximum likelihood (PPML) estimator and country-pair fixed effects.

1.6 Results: Presents and discusses the findings of the regression analyses, evaluating the statistical significance of tariff reductions on import values.

1.7 Conclusion: Summarizes the thesis findings, noting that no significant effect of tariff reductions on the import value of the analyzed agricultural product was identified.

Keywords

Free Trade Agreement, KORUS FTA, KOREU FTA, South Korea, agricultural sector, trade liberalisation, Poisson pseudo maximum likelihood, gravity model, tariff reduction, meat of swine, import value, panel data, trade creation, trade diversion, fixed effects.

Frequently Asked Questions

What is the fundamental focus of this research?

The work focuses on analyzing the impact of two major Free Trade Agreements—the KORUS FTA and the KOREU FTA—on the import value of pork (meat of swine) in South Korea.

What are the primary thematic fields covered?

The thesis covers international trade policy, agricultural economics, econometrics, and the specific analysis of regional trade agreements and their economic effects.

What is the core research question?

The research asks whether the implementation of the KORUS and KOREU FTAs led to a statistically significant increase in imports within the South Korean agricultural sector, specifically focusing on pork imports.

Which scientific methods are applied?

The study employs a quantitative approach using a gravity model estimated via the Poisson pseudo maximum likelihood (PPML) method, including country-specific fixed effects to control for heterogeneity.

What topics are discussed in the main part?

The main part encompasses a literature review, an historical background of Korean trade strategy, a detailed description of operational variables and data, and the empirical modeling and presentation of regression results.

Which keywords best characterize the work?

Key terms include Free Trade Agreement, South Korea, agricultural trade, PPML estimator, tariff reductions, and gravity model.

Why was the product "meat of swine" (pork) specifically chosen for this analysis?

Pork was selected because its consumption is linked to rising income levels and macroeconomic conditions in South Korea, providing a representative product for the agricultural sector to measure tariff impacts.

What was the main finding regarding the impact of tariff reductions?

The regression analysis suggests that tariff reductions did not have a statistically significant effect on the monetary value of pork imports from the United States or the European Union during the studied period.