korus fta

2007.11.19.

Team 7

KORUS FTA ; Boon or Bane?

- Priority to the WTO

- The power of FTA is rising

- US experience with FTAs goes back

more than two decades

Team 7 - Majjing Korea GSIS

Multi-Track Strategy

- Broad Range

- Various initiatives in the world’s

many places

Team 7 - Majjing Korea GSIS

Background of FTA in the US

- Exclusively engaged in GATT & WTO

- Diversified negotiation channels after

the breakdown of WTO in 1999

Team 7 - Majjing Korea GSIS

Background of FTA in the Korea

LOGO

Team 7 – Soo In Korea GSIS

Potential Effects on Individual Korean Industries

Macro-Economy

Manufacturing

Services

Corporate Management

LOGO

Team 7 – Soo In Korea GSIS

Macro-Economy

Positive

Production & Employment UP

Options for Consumers UP

Trade dependency on Japan DOWN

Global Standard UP

Negative

Competition among Agri/SMs UP

Income Gap UP

Hostile M&A from US firms UP

LOGO

Team 7 – Soo In Korea GSIS

Manufacturing

Negative

Machinery & ElectronicsImports UP

Chemical Products Imports

UP

Positive

Car Imports & Exports UP

Steel, Textile Exports UP

Anti-dumping TariffsDown

LOGO

Team 7 – Soo In Korea GSIS

Services

Negative

Small-and-Mid Sized firms

DOWN

Positive

Foreign Direct Inv.UP

Construction OrdersUP

Finance QualityUP

LOGO

Team 7 – Soo In Korea GSIS

Corporate Management

Negative

Domestic Price Competition

DOWN

Corporate Finance Health

Possibly DOWN

Positive

Corporate TransparencyUP

Regulations in Fair-TradeDOWN

Participation in US Procurement Market

UP

- One of the most sensitive sectors

- Tighter Intellectual Property Rights

Team 7 – Sun Mi Korea GSIS

Bane for Korea-Boon for the US

<Pharmaceuticals>

LOGO

Team 7 – Sun Mi Korea GSIS

Original VS Generic

Low risk-Low return

-Copy drugs

-domestic companies

EX) Donga-Gemcit

High risk-High return

- Large R&D expenses

- Multinational firms

EX) Lilly-Gemzar

LOGO

Team 7 – Sun Mi Korea GSIS

Bane for Korea

Positive

-Longer exclusive sales period

-More control on pricing In Korea

Negative

-No more generic medicines

-Larger dominance of US rivals

-Higher medical cost for Koreans

Boon for US

- ---

- ---

Team 7 – Wen Min Korea GSIS

Boon for Korea-Bane for the US

<Auto Industry>

LOGO

Team 7 – Wen Min Korea GSIS

Korean Car VS American Car

Ford

-~~~~

-~~~~

EX) …

Hyundai

- ~~~

-~~~~

EX)…

LOGO

Team 7 – Wen Min Korea GSIS

Boon for Korea

Negative

-Korean car makers-dominant Korean Market

(96%)

-Nontransparent Safety & Environmental

Regulations

-Ongoing FTA talks withEurope & Japan

Positive

-~~~

-~~~

-~~~~

Bane for US

- Lack of Internal agreements

- Confusing Prospects

- Obsession with ‘Trade’

Team 7 – Hae Jin Korea GSIS

Procedural Problems

- FTA is a global trend

- FTA is a competition among firms

- Both will see gains as well as losses

- Decision is in your hands, Now.

Team 7 – Hae Jin Korea GSIS

Summary & Conclusions