Research Reports
Economic Analysis of the Non Tariff Measures of Agri-Food Products in Korea
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AuthorSong, Jooho
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Publication Date2010.10.01
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Original
As tariffs are reduced in the process of global trade liberalization, non-tariff measures(NTM) are widely believed to assume an increasingly important role in determining international trade in agri-food products. Tariffs and other trade policy instruments have been disciplined during rounds of trade negotiations under the GATT and WTO, but the significance and the economic impact of NTM is known relatively less than tariffs and quota.
This study aims first at investigating the significance of NTM and introduce the previous studies abroad relating to MTMs in ari-food products. Secondly, this study aims at analysing NTMs of major countries notified to WTO/SPS and TBT Committee. Especially, specific trade concerns(STC) raised in SPS and TBT Committee will be analysed in detail to provide better understanding of NTM for Korean policy makers. Finally, this study concentrates on estimates of economic effects of NTMs in Korea.
Korea has notified frequently SPS and TBT measures to WTO relevant Committees and lots of STC are raised against the notification. In this regard, Korea learned to pay more attention to design NTMs in confirmity with international rules and shall notify the NTMs in advance in order to avoid unnecessary conflicts with other WTO member countries.
4 cases are selected for quantifying the economic impacts of various types of NTM. Those are GM labelling, resumption of citrus export to U.S., COOL for beef and accepting regionalization of Brazil beef to Korean market. Cost-Benefit Analysis is used as a quantification method. Most cases show positive welfare changes to Korea as a whole but the size of the benefits varies depending upon the parameters used in the estimation. The quantification of NTM effects are difficult to estimate because most NTMs have relatively short history of implementation and it becomes more difficult if the analysis aims to compare the alternative options of NTMs not implemented yet. The analysis here used strong assumptions for various parameters for the estimation. Thus, the results needs precautious interpretation if applied to the political decision.
Researchers: JooHo Song, MeeBok Kim, SangGon Jun, DaeHee Jung and JungMin Lim
E-mail address: jhsong@krei.re.kr
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