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Economic Impact of the Tariff Reform : A General Equilibrium Approach (관세율(關稅率) 조정(調整) 경제적(經濟的) 효과분석(效果分析) : 일반균형적(一般均衡的) 접근(接近))

  • Lee, Won-yong
    • KDI Journal of Economic Policy
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    • v.12 no.1
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    • pp.69-91
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    • 1990
  • A major change in tariff rates was made in January 1989 in Korea. The benchmark tariff rate, which applies to about two thirds of all commodity items, was lowered to 15 percent from 20 percent. In addition, the variation in tariff rates among different types of commodities was reduced. This paper examines the economic impact of the tariff reform using a multisectoral general equilibrium model of the Korean economy which was introduced by Lee and Chang(1988), and by Lee(1988). More specifically, this paper attempts to find the changes in imports, exports, domestic production, consumption, prices, and employment in 31 different sectors of the economy induced by the reform in tariff rates. The policy simulations are made according to three different methods. First, tariff changes in industries are calculated strictly according to the change in legal tariff rates, which tend to over-estimate the size of the tariff reduction given the tariff-drawback system and tariff exemption applied to various import items. Second, tariff changes in industries are obtained by dividing the estimated tariff revenues of each industry by the estimated imports for that industry, which are often called actual tariff rates. According to the first method, the import-weighted average tariff rate is lowered from 15.2% to 10.2%, while the second method changes the average tariff rate from 6.2% to 4.2%. In the third method, the tariff-drawback system is internalized in the model. This paper reports the results of the policy simulation according to all three methods, comparing them with one another. It is argued that the second method yields the most realistic estimate of the changes in macro-economic variables, while the third method is useful in delineating the differences in impact across industries. The findings, according to the second method, show that the tariff reform induces more imports in most sectors. Garments, leather products, and wood products are those industries in which imports increase by more than 5 percent. On the other hand, imports in agricultural, mining and service sectors are least affected. Domestic production increases in all sectors except the following: leather products, non-metalic products, chemicals, paper and paper products, and wood-product industries. The increase in production and employment is largest in export industries, followed by service industries. An impact on macroeconomic variables is also simulated. The tariff reform increases nominal GNP by 0.26 percent, lowers the consumer price index by 0.49 percent, increases employment by 0.24 percent, and worsens the trade balance by 480 million US dollars, through a rise in exports of 540 million US dollars and a rise in imports of 1.02 billion US dollars.

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U.S. FRESH SALMON MARKET (미국의 연어 시장 가격 예측에 관한 연구)

  • Dae-Kyum Kim
    • The Journal of Fisheries Business Administration
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    • v.18 no.1
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    • pp.99-114
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    • 1987
  • U. S. commercial landings of wild salmon have remained relatively stable for the past 5 years, averaging 300,000 MT. While the same period, U. S. imports of fresh salmon have increased over ten fold from 1.8 to over 19 million pounds. Over 70 percent of the new supplies of fresh salmon come from Norway. Norway exports to the United States were negligible in 1980 and 1981. However, U. S. imported 1,768 M. T. in 1983, 3,896 M. T. in 1984, and 6,272 M. T. in 1985. Over the past 5 years, import price of fresh wild salmon from Canada has declined steadily from $2.58 per pound to $1.25 per pound in 1985, while those from Norway had remained unchanged, ranging from $3.28 to $3.45 over the same period. Norway's cultured salmon entered the United States in 1985 at about $3.35/1b., roughly triple the price of Canadian fresh wild salmon imports. U. S. apparent consumption of fresh and frozen salmon has sharply increased from 50,000 MT in 1981 to 92,000 MT in 1985, up 86 percent over the five years. Annual per capita consumption has increased steadily from 0.47 pounds in 1981 to 0.85 pounds in 1985. The estimated demand models show that the annual wholesale price of fresh salmon in the U. S. market would be declined by increase in supplies and would be raised by increase in the U. S. GNP. The empirical results in this study show that wholesale price of fresh salmon in 1990 would remain unchanged at the 1985 level, under the following condition: 1) Norwegian production of Atlantic fresh salmon would reach 80,000 MT (176 million pounds by 1990) 2) Imports of Norwegian Atlantic fresh salmon would keep the same percentage (21%) of Norwegian productions in 1990 3) Imports from other countries and U. S. domestic production would increase and maintain the same level of 25% of U. S. total supplies in 1990 4) U. S. GNP would increase by $200 billion annually, slightly less than in the past years.

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Global Value Chain Change and Government R&D Investment Strategy due to Trade Dispute with Japan - Focussing on Automobile Industry (대일 무역분쟁으로 인한 글로벌 가치사슬 변화와 정부 R&D 투자전략 - 자동차산업을 중심으로 -)

  • Jung, Jae-Woong;Won, Dong-Kyu;Kim, Kwang-Hoon
    • The Journal of the Korea Contents Association
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    • v.21 no.1
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    • pp.12-23
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    • 2021
  • Due to high proportion of exports, Korea has a higher dependence on the global value chain (GVC) than other major developed countries. This reason, Korea has a structure that is sensitive to GVC changes. This is because Korean exports are concentrated on specific countries and items, and most of the materials for export tend to depend on imports. Currently, export restrictions resulting from trade disputes with Japan can affect the industry of Korea as a whole due to the supply of core materials. Therefore, in order to minimize economic damage caused by export regulations in the current situation, it is necessary to reorganize the GVC, through efforts to rapidly diversify imports and localize imports that depend on Japan. To this end, it is necessary to derive and classify imported goods that depend on Japan, and to localize items that are difficult to diversify imports, and prompt R&D investment is required for this. This study aims to support R&D investment policy through quantitative analysis based on big data rather than a decision-making method based on expert-centered qualitative analysis.

Structure of Export Competition between Asian NIEs and Japan in the U.S. Import Market and Exchange Rate Effects (한국(韓國)의 아시아신흥공업국(新興工業國) 및 일본(日本)과의 대미수출경쟁(對美輸出競爭) : 환율효과(換率效果)를 중심(中心)으로)

  • Jwa, Sung-hee
    • KDI Journal of Economic Policy
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    • v.12 no.2
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    • pp.3-49
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    • 1990
  • This paper analyzes U.S. demand for imports from Asian NIEs and Japan, utilizing the Almost Ideal Demand System (AIDS) developed by Deaton and Muellbauer, with an emphasis on the effect of changes in the exchange rate. The empirical model assumes a two-stage budgeting process in which the first stage represents the allocation of total U.S. demand among three groups: the Asian NIEs and Japan, six Western developed countries, and the U.S. domestic non-tradables and import competing sector. The second stage represents the allocation of total U.S. imports from the Asian NIEs and Japan among them, by country. According to the AIDS model, the share equation for the Asia NIEs and Japan in U.S. nominal GNP is estimated as a single equation for the first stage. The share equations for those five countries in total U.S. imports are estimated as a system with the general demand restrictions of homogeneity, symmetry and adding-up, together with polynomially distributed lag restrictions. The negativity condition is also satisfied for all cases. The overall results of these complicated estimations, using quarterly data from the first quarter of 1972 to the fourth quarter of 1989, are quite promising in terms of the significance of individual estimators and other statistics. The conclusions drawn from the estimation results and the derived demand elasticities can be summarized as follows: First, the exports of each Asian NIE to the U.S. are competitive with (substitutes for) Japan's exports, while complementary to the exports of fellow NIEs, with the exception of the competitive relation between Hong Kong and Singapore. Second, the exports of each Asian NIE and of Japan to the U.S. are competitive with those of Western developed countries' to the U.S, while they are complementary to the U.S.' non-tradables and import-competing sector. Third, as far as both the first and second stages of budgeting are coneidered, the imports from each Asian NIE and Japan are luxuries in total U.S. consumption. However, when only the second budgeting stage is considered, the imports from Japan and Singapore are luxuries in U.S. imports from the NIEs and Japan, while those of Korea, Taiwan and Hong Kong are necessities. Fourth, the above results may be evidenced more concretely in their implied exchange rate effects. It appears that, in general, a change in the yen-dollar exchange rate will have at least as great an impact, on an NIE's share and volume of exports to the U.S. though in the opposite direction, as a change in the exchange rate of the NIE's own currency $vis-{\grave{a}}-vis$ the dollar. Asian NIEs, therefore, should counteract yen-dollar movements in order to stabilize their exports to the U.S.. More specifically, Korea should depreciate the value of the won relative to the dollar by approximately the same proportion as the depreciation rate of the yen $vis-{\grave{a}}-vis$ the dollar, in order to maintain the volume of Korean exports to the U.S.. In the worst case scenario, Korea should devalue the won by three times the maguitude of the yen's depreciation rate, in order to keep market share in the aforementioned five countries' total exports to the U.S.. Finally, this study provides additional information which may support empirical findings on the competitive relations among the Asian NIEs and Japan. The correlation matrices among the strutures of those five countries' exports to the U.S.. during the 1970s and 1980s were estimated, with the export structure constructed as the shares of each of the 29 industrial sectors' exports as defined by the 3 digit KSIC in total exports to the U.S. from each individual country. In general, the correlation between each of the four Asian NIEs and Japan, and that between Hong Kong and Singapore, are all far below .5, while the ones among the Asian NIEs themselves (except for the one between Hong Kong and Singapore) all greatly exceed .5. If there exists a tendency on the part of the U.S. to import goods in each specific sector from different countries in a relatively constant proportion, the export structures of those countries will probably exhibit a high correlation. To take this hypothesis to the extreme, if the U.S. maintained an absolutely fixed ratio between its imports from any two countries for each of the 29 sectors, the correlation between the export structures of these two countries would be perfect. Therefore, since any two goods purchased in a fixed proportion could be classified as close complements, a high correlation between export structures will imply a complementary relationship between them. Conversely, low correlation would imply a competitive relationship. According to this interpretation, the pattern formed by the correlation coefficients among the five countries' export structures to the U.S. are consistent with the empirical findings of the regression analysis.

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A Study on the Efficacy for Promising Ex-Importable Items of CEPA between Korea & India - Focused on the Ex-Import Performance in 2010 - (한.인도 CEPA 수출입유망품목의 효과 연구 - 2010년 수출입실적을 중심으로 -)

  • Lim, Mok-Sam
    • THE INTERNATIONAL COMMERCE & LAW REVIEW
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    • v.49
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    • pp.545-566
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    • 2011
  • This paper study on the effect of the removal or reduction of the tariff on Korea-India trade by CEPA between Korea & India and then examines the effects of increased exports & imports to Korea on India. Despite the analysis is based on data over a short period of time, this paper shows that CEPA between Korea & India has substantially increased Korean exports(42.7%) and imports(37%) to India in 2010. It is also shown that CEPA between Korea & India has had a considerable impact on market. As a result can be summarized as follows. The potential fields of expanding the trade between the two countries due to the tariff concessions of the removal or reduction. Consequently the effect of the removal or reduction of tariff will be low our expectation but CEPA between Korea & India would have a positive effect on Korea's exports to India in the long term. This paper has examined the impact of CEPA between Korea & India on general economy. It needs a further study to estimate trade diversion effect of CEPA and to find out the impacts on specific industry.

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GOVERNMENT-CIVIC GROUP CONFLICTS AND COMMUNICATION STRATEGY: A TEXT ANALYSIS OF TV DEBATES ON KOREA'S IMPORT OF U.S. BEEF

  • Cho, Seong Eun;Choi, Myunggoon;Park, Han Woo
    • Journal of Contemporary Eastern Asia
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    • v.11 no.1
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    • pp.1-20
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    • 2012
  • This study analyzes messages from Korean TV debates on the conflict over U.S. beef imports and the process of negotiations over the imports in 2008. The authors have conducted a content analysis and a semantic network analysis by using KrKwic and CONCOR. The data was drawn from nine TV debates aired by three major TV networks in Korea (MBC, KBS, and SBS) from 27 April 27 2008 to 6 July 2008. The results indicate substantial differences in the semantic structure between arguments by the government and those by civic groups. We also investigated the relationship between the terms frequently used by both sides (i.e., the government and civic groups), and the terms used exclusively by one side. There was a gradual increase in the number of terms frequently used by both sides over time, from the formation of the conflict to its escalation to its resolution. The results indicate the possibility of general agreement in conflict situations.

An Empirical Study on the Export and Import Effects of Foreign Direct Investment on the Blue Economic Zone of the Shandong Peninsula in China

  • Lee, Sung-Joon;Zhai, Shuai
    • Journal of Distribution Science
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    • v.11 no.1
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    • pp.15-23
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    • 2013
  • Purpose - During a reform period lasting 30 years, the Blue Economic Zone (BEZ) in the Shandong Peninsula has made progress in attracting foreign investment, and has acquired the foreign direct investment (FDI) essential for economic growth. It is therefore important to conduct a proactive and systematic study of FDI in the BEZ. Research design, data, methodology - This dissertation discusses the contribution of FDI on economic growth, from both a theoretical and empirical perspective. Taking seven core cities for study, statistics and econometrics are used, and panel data are used to validate FDI contribution to import and export in the BEZ. Results- FDI was found to exert both positive and negative influences on the imports and exports of the BEZ. In other words, the research findings are consistent with Trade Generated and Inverse Trade Generated theories put forward by Kojima and Mundell, among other researchers mentioned earlier in this paper. Further, FDI has greatly increased imports and exports for the BEZ. Conclusions - According to the results of this empirical study on local investment environment optimization, FDI plays an important role in foreign trade. This dissertation puts forward recommendations on using FDI to better promote economic growth in the BEZ.

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Economic Analysis of Landfill Gas Recycling Considering Environmental Benefit (환경편익을 고려한 매립가스 자원화 사업의 경제성분석)

  • Kim, Young-Jun;Lee, Jong-Yeon;Koo, June-Mo;Kang, Yong-Tae
    • Korean Journal of Air-Conditioning and Refrigeration Engineering
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    • v.22 no.4
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    • pp.181-188
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    • 2010
  • The objectives of this study are to analyze the possibility of the landfill gas recycling for the middle and small scale landfills where the recycling facilities are not installed in Korea. It was found that the power generation plants by landfill gas were installed in domestic 15 landfills and the gas engine generation was adopted in 14 places. As the result of economic analysis, the landfill gas recycling is found to be available in 12 places and CERs of 153,693 $tCO_{2e}$ can be secured per year. Through the reduction of the air pollutants and VOCs, the social benefits of 730 million won accrue per year. Also, the power production of 18.8 GWh will substitute the crude oil imports of 4,048 TOE and the revenue of 2.49 billion won is expected to power trading. It is also found that the power generation plants by landfill gas will give the social benefits such as the reduction of the environmental problems and the substitution effect of crude oil imports.

The Competitiveness of Korea-China-Japan agricultural products and Korea-China FTA Agricultural Trade impacts (한·중·일 농산물 경쟁력과 한·중 FTA 농산물 교역량증가 효과)

  • Nam, Kuk-Hyun;Li, Tianguo
    • Journal of Agricultural Extension & Community Development
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    • v.25 no.2
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    • pp.71-83
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    • 2018
  • This study aims to analyze the competitiveness of agricultural products in Korea, China and Japan and the effect of increasing imports from Korea and China. and then we discussed how to cooperate in the agricultural trade field between the three countries. The results are summarized as follows. First, The intra-industry trade of agricultural products was the most active in Korea and China, followed by the intra-industry trade index between Korea and Japan. The intra-industry trade between China and Japan were the lowest. Second, The mutual complementarity of agricultural products trade between Korea, China and Japan is mostly high. Among them, Korea and Japan are the highest, while Japan and China have the lowest complementarity. Third, it was found that in tariff elimination, imports of rice and meat products increased the most, while the import growth rate of green tea, meat products and ginseng increased the most. Finally, the three countries in Korea, China, and Japan can consider the way to increase the trade of agricultural products in the region by internalizing the trade of complementary items while maintaining a constant level of production of mutually competitive products.

An Analysis on Trade Competitiveness between Korea and China (한.중간 무역경쟁력 분석 -섬유.전기전자.운송.기계산업을 중심으로-)

  • Lee, Sung-Ah;Shin, Kyung-Soo
    • International Commerce and Information Review
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    • v.8 no.4
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    • pp.45-69
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    • 2006
  • First, the trade competitiveness of the textile industries in South Korea has been weakening, whereas, the counterpart in China has been growing as the main export industries. Second, the trade competitiveness of the mechanics industries in South Korea has been increasing and appearing as the new promising strategic export industries. And, the counterpart in China also shows that it has been rising, while the country’s level of the imports specialization index has been weakening. Third, the trade competitiveness of the transportation industries in South Korea has been rising as the export-oriented and at the same time, privileged industries. And, China has also been rising as South Korea has been in the case, whereas, imports specialization index has been weakening. Fourth, the trade competitiveness of the electrical and electronic industries in South Korea has relatively been at the very high level, giving rise to the core export-privileged industries in the South Korea. And, China has been emerging as the new strategic export industries, as its industry structure has been shifted from the import- specialization and export-specialization industries. Fifth, it is indicated that the trade in the both South Korean and Chinese industries of fable materials, mechanics goods for computer & office, and goods for electric mechanics has been going favorable and brisk.

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