한·중 자유무역협정의 추진방향에 관한연구

Abstract

This study investigates how a Free Trade Agreement (FTA) among Korea and China contributes to the economic growth of each country. We first estimate the trade enhancing effect of the FTA of the two countries, and then estimate how this increased trade advances the economic growth. In addition, we explore how the FTA alters the industry structure of trade in each country and thereby influences the growth impact of the FTA. In contrast to other studies on the economic effects of an FTA, our study relies on the actual data of the past experiences of the existing FTAs. In addition, by paying special attention to the three countries' close geographical location, we develop a new methodology that gives us a more realistic estimate of the trade creation effect of the two-country FTA. The issues in the manufacturing sector are quite different. The manufacturing sectors in Korea and China are complementing each other in terms of technological level, with Korea exhibiting a comparative advantage in more technology- and capital intensive production and China possessing a comparative advantage in relatively labor-intensive production. Furthermore, there has been an expansion of intra-industry trade within the manufacturing sector. In order to build an environment for Korea-China FTA, a number of steps need to be taken. These include: an early establishment of a joint study comprising the government, civil experts and enterprises; a consensus building process for the general public; and an excercise of leadership on the basis of the belief that Korea-China FTA will provide a framework of co-prosperity in Northeast Asia.