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131. Beyond Coronabonds: A New Constituent for Europe

Author:
Nicoletta Pirozzi
Publication Date:
04-2020
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
Every era has its symbols. In 1984, Mitterrand and Kohl held hands on the battlefield in Verdun, coming to symbolise the importance of peace in the pursuit of European integration. Today, in times of COVID-19, the so-called “Coronabonds” could have emerged as the symbol of a new Europe, one that is ready and able to do what it takes to collectively overcome the present crisis. Yet, what some member states consider an indispensable emblem of European solidarity, namely debt mutualisation to face an unprecedented symmetric crisis brought about by COVID-19, is regarded by others as an ultimate excuse for moral hazard. As a result, Europe could end up with a politically more digestible European Fund, as proposed by Commissioners Paolo Gentiloni and Thierry Breton, designed to issue long-term bonds.[1] Or, as outlined by the Eurogroup, a Recovery Fund that is “temporary, targeted and commensurate” to the extraordinary costs of the current crisis, helping to spread them across time.
Topic:
Financial Crisis, Governance, Finance, Economy, and Coronavirus
Political Geography:
Europe and European Union

132. WTO Industrial Subsidy Regulation: US-EU-Japan Joint Statement of January 2020 and Afterwards

Author:
Cheon-Kee Lee
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
On 14 January 2020 the United States, the European Union, and Japan (hereinafter referred to as “US-EU-Japan”) issued a trilateral joint statement, proposing a set of new rules to strengthen WTO regulation on industrial subsidies. While a total of seven joint announcements have been made so far, this is the first time that three WTO Members have presented specific ideas on how to amend existing subsidy rules. Many of the proposed amendments seem to primarily target China’s trade policy and practices. Among the six amendment items proposed in the Joint Statement, it seems that the United States is paying particular attention to the sixth item, i.e. in making explicit the possibility of using the out-of-country benchmark and on introducing necessary requirements to do so in measuring the benefit conferred and, ultimately, in calculating the amount of the countervailing duties (CVDs). Against this backdrop, in this Brief the author analyzes the relevant WTO provisions and GATT/WTO jurisprudence, and discusses various scenarios on future negotiations on WTO Reform on industrial subsidies.
Topic:
World Trade Organization, Economy, Negotiation, Trade Policy, and Industry
Political Geography:
Japan, China, United States of America, and European Union

133. Analysis of the Turkish Services Industry and Korea-Turkey Cooperation

Author:
Cheol-Won Lee, Hyun Jean Lee, Mahmut Tekçe, and Burcu Düzgün Öncel
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The Agreement on Trade in Services and the Agreement on Investment between Korea and Turkey came into effect in August 2018. This article focuses on the construction sector and the cultural contents sector to seek possible cooperative measures between the two countries.
Topic:
International Cooperation, Treaties and Agreements, Culture, Economy, Investment, and Industry
Political Geography:
Turkey, Middle East, Asia, and South Korea

134. The Economic Effects of Multinational Corporation Withdrawal and Policy Implications

Author:
Minsoo Han, Hyuk-Hwang Kim, Hyelin Choi, Danbee Park, and Jisu Kim
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The shutdown of the GM Koreas Gunsan plant in May 2018 heightened social interest in the withdrawal of mutlinational corporations (MNCs). Against this backdrop, the forthcoming research The economic effects of multinational corporation withdrawal and policy responses studies the previous cases of MNC withdrawal, estimates the effects on labor market., and provides policy directions to address to the withdrawal. This note summarizes some of its important results.
Topic:
International Trade and Finance, Economy, Multinational Corporations, and Economic Policy
Political Geography:
Asia and Korea

135. North Korea’s Trade System and Implications for Inter-Korean CEPA

Author:
Jang Ho Choi and Yoojeong Choi
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study examines changes in trade-related legal systems in North Korea and ac-tual trade transactions, and analyzes them in accordance with international standards (the WTO regulatory framework). Through this process, we will draw up measures to im-prove North Koreas trade system to open up the external economy as well as signing of a Comprehensive Economic Partnership Ar-rangement (CEPA). The results of this study will contribute to understanding the main characteristics of trade-related laws and sys-tems within North Korea and suggest promis-ing directions for their improvement.
Topic:
Bilateral Relations, Partnerships, Economy, and Trade
Political Geography:
Asia, South Korea, and North Korea

136. An Analysis of Service Trade Regulation in ASEAN and Its Implications

Author:
Meeryung La
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The Korean government has been pursuing a New Southern Policy (NSP) focusing on the “3P” areas of cooperation ‒ People, Prosperity, and Peace. The NSP puts people at a center of policy, and emphasizes the enhancement of cultural conversation and people-to-people exchange between Korea and ASEAN. The majority of services trade, an area with a low level of cooperation between Korea and ASEAN, is inherently based on the exchange of people. Promoting services trade flows between Korea and ASEAN could contribute to achieving the vision of a People-centered community in the region. Also, when taking into account the fact that services are integral to the working of GVC, the government should pursue policies to promote services trade and to enhance cooperation with ASEAN in the services sector. To this end, we aim to identify the current status of service trade and service trade barriers between ASEAN and Korea. This report briefly covers ASEAN’s trade in services and the restrictiveness of service trade regulations in ASEAN, and then suggests policy recommendations based on the results.
Topic:
International Cooperation, Regulation, Economy, Economic Policy, and Trade
Political Geography:
Asia and South Korea

137. Data-and AI-driven Economic Growth in a General Equilibrium Model

Author:
Kyu yub Lee and Hyun Park
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
We attempt to characterize a data- and AI-driven economy and establish a general equilibrium growth model in order to describe the data economy and examine how data and AI can affect the economy in the long run. To sum up, this article provides three policy implications. First, the authority should have a balanced view between privacy protection and data usage in economy-wide technology in terms of long-run growth. Privacy should not be considered only as utility loss, but must be considered as a contributor to loss in growth rates. Second, economic growth can be achieved by using higher amounts of data as well as continuous development in AI technology. A caveat is that AI-technology can boost economic growth only when it applies to all industries as general purpose technology. Lastly, the authorities should keep considering how to deal with new issues that include data ownership, outlaw data sharing, data market, AI bias, and so forth. Our model can be used as a starting point to such examinations.
Topic:
Science and Technology, Privacy, Economic growth, Economic Policy, and Artificial Intelligence
Political Geography:
Asia and South Korea

138. Analysis of Economic Cooperation between Kazakhstan and South Korea

Author:
Yessengali Oskenbayev
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This article investigates the potential direction of the Kazakh-Korean economic relationship. The two countries have become major partners in their economic relationship. It is important for Kazakhstan to establish economic relations with South Korea, to diversify its economy. Kazakhstan’s economy is strongly dominated by mineral resources extractive sectors, and the country’s rapid economic growth during the period from 2000 to 2007, and afterward due to oil price increases, was not well translated into substantial growth of non-extractive sectors. Kazakhstan could employ strategies applied by Korean policymakers to sustain business and entrepreneurship development.
Topic:
Development, Bilateral Relations, Economic growth, Economic Policy, Diversification, Trade, and Economic Cooperation
Political Geography:
Central Asia, Kazakhstan, Asia, and South Korea

139. Potential Implications of Regional Comprehensive Economic Partnership to India-South Korea Bilateral Trade Ties

Author:
Surendar Singh
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
India and South Korea enjoy strong economic and trade relations, shaped by a significant convergence of interest, mutual good will and high-level diplomatic exchange. Bilateral trade between the two countries has also increased after signing the Comprehensive Economic Partnership (CEPA). However, the overall trade balance is in favor of South Korea due to superior comparative advantage of Korea in manufacturing as compared to India. South Korean exports are high technology-intensive while India’s exports are low-value raw material and intermediate products. Both countries are members to a mega regional trade pact – the Regional Comprehensive Economic Partnership. Though India has decided to not join the RCEP at this stage it will continue the discussion to explore possible ways to join it. Assuming that India will join the RCEP sooner or later, it is important to analyze the potential impact of the RCEP to India-South Korea bilateral trade ties. This short policy paper compares the proposed provisions of the RCEP and CEPA. It shows that the RCEP is much more comprehensive an agreement compared to the CEPA, both in terms of coverage and scope. It also provides some insights on the likely implications of the RCEP, especially from the perspective of trade with China factored against the bilateral trade ties between India and South Korea.
Topic:
International Trade and Finance, Bilateral Relations, Partnerships, and Economic Cooperation
Political Geography:
South Asia, India, Asia, and South Korea

140. The Impact of Monetary Policy on Exchange Rate and Its Policy Implication

Author:
Deok Ryong Yoon, Soyoung Kim, and Jinhee Lee
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In this study we aim to clarify the different extents to which monetary policy influences foreign exchange rate determination between the monetary policies of small open economies with international currency and those without international currency, and use empirical research to explain why. Based on the analysis above, we make some policy suggestions.
Topic:
Foreign Exchange, Monetary Policy, Economic Policy, and Currency
Political Geography:
South Korea and Global Focus