FOREIGN ECONOMIC COOPERATION AND DEVELOPMENT OF THE REPUBLIC OF KOREA THROUGH THE CONCLUSION OF FREE TRADE AGREEMENTS

Volume 8 / Issue 2/ December 2022 DOI: 10.53486/2537-6179.8-2.08 FOREIGN ECONOMIC COOPERATION AND DEVELOPMENT OF THE REPUBLIC OF KOREA THROUGH THE CONCLUSION OF FREE TRADE AGREEMENTS Dok Hee OH1 Kyung Sook GIL2 Abstract: The article discusses changes in the foreign economic policy of the Republic of Korea in connection with the deterioration of international trade at the beginning of the XXI century. The direct motive for changing the foreign economic policy of the Republic of Korea is the decline in the role of the WTO as a multilateral trading partner. On the other hand, FTA, based on economic cooperation between the two countries, is becoming a new model for economic development and cooperation in the XXI century. Bilateral negotiations are more likely to end than multilateral ones, because they are actively conducted in accordance with the interests of two countries. Therefore, free trade agreements (FTAs) are becoming the main direction of the economic policy of the Korea’s government to adapt foreign economic policy and overcome the negative trend of global economic development. An FTA has various economic effects, such as the development of trade between two countries, improving the efficiency of resource allocation, reviving investment between two countries and stimulating economic growth. In accordance with this situation, the Republic of Korea justifies the relevance of trade and economic cooperation between two countries through the conclusion of an FTA as a means of implementing an active foreign economic policy. The Republic of Korea has become an opportunity to introduce an advanced economic structure through the signing of free trade agreements with advanced countries. On the other hand, it served as an opportunity to strengthen economic cooperation through the signing of free trade agreements with developing countries. For this reason, the experience of the foreign economic policy of the Republic of Korea can serve as a good example for the economic development of developing countries. Keywords: bilateral cooperation, extension of economic cooperation, stable large market, increase in trade, economic development. JEL Code: E60, F02, F13 Introduction Since the beginning of the XXI century, regional trade agreements (RTAs) have begun to become a global trend, and bilateral and multilateral trade agreements on goods and services have begun to be actively concluded. The reason for sharp increase in RTAs 1 Dok Hee OH is candidate of Economic Sciences, Senior Researcher, State Scientific Establishment “Institute of Economics of the National Academy of Sciences of Belarus”, E-mail: . ORCID: https://orcid.org/0000-0002-4916-2217 2 Kyung Sook GIL is candidate of Economy, Associate Professor of the Department of Oriental Linguistic and Country Studies of the Faculty of International Relations, Belarusian State University, Email: , ORCID: https://orcid.org/0000-0002-9313-6796 Received: 06.10.2022 | Accepted: 16.12.2022 https://csei.ase.md/journal 103 Volume 8 / Issue 2/ December 2022 DOI: 10.53486/2537-6179.8-2.08 around the world lies in the fact that the negotiations on the DDA (Doha Development Agenda), which have begun after the creation of the WTO, have not been conducted properly. When the negotiations were launched in 2001, it was planned to bring the negotiations to conclusion before 2005 under condition of a single undertaking. However, due to conflicts between importing and exporting countries over agricultural products and between developed and developing countries over the opening of industrial markets, the negotiations are still ongoing. Due to the failure of the DDA negotiations, the WTO system, which pursues a multilateral free trade agreement, has gradually begun to reveal its limits. In addition, as trade tensions increase due to the war for economic supremacy between the USA and China, the WTO’s role in intermediary and discussion weakens. Moreover, the emergence of new protectionism combined with political problems accelerates the rapid economic blockade of the global economy. As a result, the role of the WTO, based on free trade, shows its limits, and globalization faces serious crisis (Pak, 2004). However, the purpose of the FTA policy is to ensure a stable large market and actively respond to the growing uncertainty in the export market due to the spread of new protectionisms. It is also aimed at extension of economic cooperation and facilitation of economic growth between two countries. In addition, the fundamental basis of the Korean government’s political decision to promote FTAs is the restructuring of industry, the development of the trading system, the stable extension of export markets and the extension of friendly economic cooperation. In this political direction, Chile was chosen as the first FTA target country for Korea. This was due to the fact that the Republic of Korea, which had no FTA experience, was able to obtain FTA experience, while minimizing the negative impact on Korea’s weak agriculture. The Korean government considered that the agricultural products and wine industry of Chile, which have been characterized by opposite seasons, would complement the weak agricultural sector of Korea. The Republic of Korea and Chile had been negotiating since December 1999, and an agreement was reached on the degree of opening of agricultural products and the agricultural sector, and a full agreement was reached in October 2002. Eventually, the free trade agreement between the two countries came into force on April 1, 2004. As of April 2022, 17 free trade agreements with 50 countries entered into force in the Republic of Korea. The main operating countries are Chile, Singapore, EFTA, ASEAN, India, the EU, Peru, the USA, Turkey, Australia, Canada, China, New Zealand, Vietnam, Colombia, Central America, Great Britain, RCEP and Ecuador. The countries that have signed and concluded FTAs with the Republic of Korea are Indonesia, Israel, Cambodia and the Philippines. Countries negotiating with the Republic of Korea on FTAs: ChinaJapan, Russia and MERCOSUR, Uzbekistan; the Republic of Korea needs to resume FTA negotiations with the EAEU countries (FTA Status of Korea, 2022). Received: 06.10.2022 | Accepted: 16.12.2022 https://csei.ase.md/journal 104 Volume 8 / Issue 2/ December 2022 DOI: 10.53486/2537-6179.8-2.08 1. Literature review The purpose of the FTA policy is to ensure a stable market and actively respond to the growth of uncertainty in the external economic environment. It is also aimed at extension of economic cooperation and facilitation of economic growth between two countries through free trade agreements. FTAs have various economic effects, such as the development of trade between two countries, improving the efficiency of resource allocation, stimulating investment between two countries and promoting economic growth. The fundamental basis of the Korean government’s political decision to promote FTAs is the restructuri (...truncated)