Monday, May 14, 2007

KORUS FTA: The Good, The Bad and The Ugly


KORUS FTA: The Good, The Bad and The Ugly


A cross-section of some of the better presentations I received on the topic for midterms. I submitted these for publication to the school newspaper so I thought it would also be good to exemplify student output here.


Won Chang Min

April 2, 2007 South Korea and the USA concluded the FTA( Free Trade Agreement) dramatically. The FTA conclusion which is called 'KORUS' made us trade with a huge market called the 'USA' without any limits. With this, Korea undergoes big changes. Instead of gains in a huge market called the 'USA', our unstable domestic market becomes uncertain.

One of the benefits is as the student who learns 'international trade' expanded trade market means there will be more jobs for me. Also, activation of trade will bring activation of our country's overall economy. On the other hand, our domestic service industry, which has a weaker foundation then the USA can get damaged because of the USA. The FTA is no longer an option. It is an essential matter. We will in turn enhance national competitiveness, ultimately contributing to enhancing trade and income. And I have to understand effects of these two side so it can be helpful to my vision.

Lee Seung Hak

Thank you for coming, everyone. My name is Lee Seung Hak. I would like to talk about the costs and benefits of the FTA in this class. Does anyone know what's the FTA mean? FTA is the initials of Free Trade Agreement. It is an arrangement to shift free products from country to country. If we have trade with countries ,making agreements like the FTA makes both countries have no fences to trade. Now, our county has signed the contract of the FTA with the USA on Apr, 2, 2007. Also, we are planning contracts of FTA with China, Japan, and Canada.

First, I would like to talk about the benefits of the FTA. The first benefit of the FTA is to spread foreign investment and to create jobs. The foreigners will invest in our country, so that, our industry is developed. Maybe, they will hire many employees because the companies will need them. The second benefit of the FTA is to set up global standard systems and service department systems to be more competitive . By reason of the FTA, we will gain advanced systems from abroad, so our service systems can become more developed. The third benefit of the FTA is to increase exports. If we join the FTA, we can get a stable market position and decrease trade costs.

Next, I will talk about the costs of the FTA. The first cost of the FTA is that our weakest industries will die. Under the FTA, some of the industries need to be more competitive. However, in the case of agricultural products it will be difficult. Under the FTA, our farmhouses have no option but to die.

Now, we have taken the first step to the FTA. So, we will try hard to get benefits.
Thank you for attention.

Cho Eun Jung

Discuss the costs and benefit of the FTA

FTAs have now become a global trend. FTAs were set up to eliminate tariffs on goods and services as well as bring down non-tariff trade barriers. Their main objective was the elimination of tariffs and expansion of trade.

Benefits of the FTA

1.The tariff wall falls, itwill allow imported goods and they will be available for purchase.

2.The products will not only be able to be produced inexpensively from domestic costs, Korea will be able to produce exchanges with the maximum efficiency and profits.

3.If education or medical treatment becomes opened, there will be quality improvement.

4.Advancement of quality industry is a possibility in many industrial sectors which are weak and currently face limitations in technology and knowledge resources.

Costs of the FTA

The FTA may cause income product price depreciation which follows short-term tariff depreciation in some forecasts. The domestic products will face greater price competition which will augment consumer public welfare. Production profits may be converted to consumer profits. Also, service market opening due to Korean FTA will lower direct prices. And service quality improvement may mean the profits will decrease as a direct effect on the consumers. Rapid increases in FTA among countries that were not in geographic proximity as well as between developed and developing countries has become common.

Kim Hyung Jik

Korea concluded a free trade agreement with the USA. Everyone calls it the KORUS. It is Korea plus USA. Many people like free trade deal with the USA. Why do they like it? Because it give benefits. FTA removes the barriers on trade. So many people trade better than before FTA. And they may take more benefits. For the more, trade liquidity is larger. If you sell the car to USA. You must give 10% of price tax to USA. Now, you don't do that. In FTA we don't have a tax obligation in trade. But, FTA is not perfection. If you are farmer you would better change the job. Because many agricultural products maybe come low in price. Who will buy high priced agricultural products. Maybe no one will buy your high price one. FTA w! ill give many costs and benefits. It will change our position. But national benefit is expected to be very high. It will change the destiny of our future generations.

Na Eun-Sub


About the FTA


Two weeks ago KOREA and the USA had finished the FTA. The FTA is abbreviated Free Trade Agreement. Some Korean's worry about the FTA. However I think, The FTA is not a worry. It is a chance. Two years ago, Korea had an FTA with Chile. Many Koreans were worried about FTA. But it turned out to be beneficial to both exports and imports of Korea. Two years after the FTA took effect, Korea`s exports to Chile increased 2.3 times to $1.2 billion compared to the year before the trade agreement.


The FTA is a general trend in world trade. A trade agreement between Korea and United States makes a new market. The countries will become one market. So Korea and The USA made a benefit to both exports and imports. Today FTAs are no longer an option. It is essential for the world economy. A free trade agreement with the United States cannot be an exception to this.

Dong-geul Park

Benefit of Korea-America FTA through the Korea-Chile FTA

Korea and Chile concluded FTA on April 1st, 2004 in spite of the farm workers opposition. This figure shows us changing rate about imports and exports toward Chile from Ministry of Financial and Economy Republic of Korea. We know that the balance of payments is falling.
I insist Korea-Chile FTA was successful even though the balance of payments is falling, however. The most damage part toward Chile is a mount of copper (Cu). Except copper, the FTA is win-win so far. Korea imports a large of copper from Chile after the conclusion of the FTA. But through the FTA, Korea could buy the copper from Chile very cheaply, so we could make many of electric products and electricity. It made as a stepping-stone for future exporting success.

Especially, in electronic products, Korea keeps going strength, but Japan who does not conclude FTA with Chile is degrading. Actually, most Korean cars had had a tough time in the world market because, the revaluation of won currency and devaluation of yen currency, except in Chile. The grape farmers worry is not serious because of seasonal customs duties during September to April. Korean grape farmer has sold on May to October, Chile has sold on September to April. As you heard, Korea-Chile FTA is successful conference.

Let us see the Korea-America FTA. Korea and U.S.A. concluded FTA on April 2nd, 2007.
Let us look at some advance of Korea-America FTA. Advance 1st Safe security of the world market. Korea can have prior occupation than competitor nation such as Japan, China, Taiwan.
Advance 2nd Improve foreign-confidence. When the foreign confidence is high, foreign investment can also increase. Advance 3rd Promotion of a domestic higher value-added business. U.S. is the most industrial country, so Korea can make it. Korea can attract lots of investment, strengthen technological development. Advance 4th Become a base of the East Asia hub. Korea can be the head office of Asia. If it will be true, Korea can deal with other countries financial, physical distribution and service business.

Conclusion

Korea is ready to have strength of trade and commercial agreement. And, Korea government can give an understanding the people why FTA is good.

Jung Wook

Hi, everyone. I'm happy to be here to speak.

As you all know, there was a FTA negotiation between South Korea and the United States of America in April 2nd, 2007. As negotiation was proceeded for a long time, the FTA conclusion is our nation's historic event. Today, I want to tell you about FTA negotiation and Korea economy.

While world order changes suddenly, this FTA will serve as an important momentum for Korea to form a strategic partner relation economically and politically with the United States of America.

Actually, current account deficit is the biggest problem in the U.S. and especially, China has the most power of influence. This FTA will contribute to American trade deficit reduction and contribute in international economy stability as well as offers connection ring with Northeast Asia which is growing.

However, there are many people who is opposed to this FTA negotiation. They say that trade opening can cause bipolarization of economy. Some people say that importation opening cause farm village collapse.

Actually, in case of Korean farm produce, price competitive power is lower than other countries. They worried about that if they open beef, pork market, livestock farmhouse goes bankrupt and that is linked by rapid increase of agriculture trade deficit.

Anyway, I'm sure that this FTA negotiation is an opportunity that can pull one step Korean economy. In case of domestic enterprise, they needs to activate restructuring to promote competition. Also, through domestic investment and foreign investment activation, we need to restore Korea economy which has falled in low growth and low investment.

Low investment causes economic growth rate fall and this is connected by stagnation of domestic income and comsumption again. According as export duty for the United States of America is lifted, it is expected that FDI increase of Japan, the EU countries to make the most use of production installation of export goods for America.

Kim So Young

I will start my presentation. I will be presentating about FTA. FTA is simplified characters of Free Trade Agreement and as it says, doing trade without or less duty. We have to contract a FTA. Because our trade dependence is 70%. In our country, trad is very important. If we averted it, bring about a loss and isolation. New problems are come up with like rice, vehicle, beef, medicine and so on. There are advantages as well as disadvantages to the US, Korean. On the downside, famers and industry will be damage and medicine price will result in high. It will abolish labor and environment regulation so it will bring about a environment disruption. On the positive side, those with no jobs will have works because service industrie! s will be more competitive. And the market can sell more goods or food. The FTA of Korea and the US faces each other in world-wide anger inside infinite competition and it secures a national competitive power. The country which it opens is successful and the failure but the economy which is isolated it could not be successful. If we loosen the propulsion of the FTA from the tendency where the many countries contract the FTA of various nations, we well be turned over.

Lee Jung Yong and Kim Hee Jung

FTA : The Good vs. the Bad

Jung Yong : This presentation is about the FTA. There are many countries worldwide that have signed free trade agreements. I present to you an example of the good impact of the FTA. Nowdays is globalization, I expect the FTA is a step to take a big leap in becoming a developed nation. Custormers can buy at lower prices and many many products . And the agreement will improve the relationship between the U.S.-Korea partnership. This agreement will allow Korea to enter the U.S. market earlier than other nations such as Japan, Taiwan and China. The FTA with the U.S. means Korea has opened the doors wide to improve industrial and financial firms to meet global standards.

Hee Jung : I think the FTA will bring too many risks to the domestic economy. But let me present you an example of the negative impact of the FTA. If Korea sells oranges at $5. And the U.S sells the oranges at $10. But if the tariff is removed the oranges price become cheaper than in Korea. The customers will buy the U.S oranges. Therefore, many domestic farmers in Korea will lose their jobs because of the cheap and well-cultivated US products. I think they should think about this negative point, such as the agricultural and service sectors.The FTA will give Korea a more influential trading position compared to China and Japan, but I worry heavily about the side effects in many fields.

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