Implications of the Republic of Korea’s package for enhancing FTA utilization
This policy brief reviews the Republic of Korea’s experience in implementing Free Trade Agreements (FTAs) with a particular focus on measures taken to increase the utilization of preferences available under FTAs by Korean exporters. Key findings:
- The Republic of Korea was relatively late in negotiating FTAs with major trading partners. However, following a spate of activity in recent years it now has over 50 trade agreements with other countries.
- While FTAs provide exporters with preferential access to partners’ markets, utilization of these preferences is often low for a variety of reasons including a lack of awareness amongst businesses as to how to take advantage of available preferences.
- The Republic of Korea has taken a number of steps to successfully raise the utilization rate of its FTAs between 2007 and 2013. Utilization rates are now between 40 and 90 per cent: higher than the regional average.
- Support for and consultation with businesses given by theFTA Promotion and Policy Adjustment Authority was crucial for improved utilization of FTAs by exporters. But more can still be done to provide support for SMEs which are less likely to use FTA preferences.