Korea Lacks Institutes Assessing Impact of FTA With US on Economy
By Seo Jee-yeon
Staff Reporter
To successfully carry though talks on a free trade agreement (FTA) with the U.S., a right assessment of its economic impact on is essential. But the government is having difficulty finding the right institutes to assess such impact.
To find an institute for the assessment of the economic affects of a Korea-U.S. FTA, the Ministry of Finance and Economy (MOFE) re-posted a bidding for the selection of an assessment institute due to an earlier lack of applications at the end of last month.
The ministry restarted bidding as the state-invested Korea Institute for International Economic Policy (KIEP) was the only applicant.
The problem is the KIEP had already conducted a study on its own under the same theme last year, concluding a Korea-U.S. FTA will increase Korea’s real growth domestic product by as much as 1.99 percent and boost exports to the United States by 15 percent. And, it will lower price levels in Korea by 0.9 percent, increasing consumer welfare.
If KIEP is again the only bidder, the ministry will have no other choice but to award the bidding to them.
“We tried to invite private thinktanks to bring varied perspectives on the issue, but they are reluctant as there are few authorized ways to measure the economic effects of a free trade pact,’’ a ministry official said.
Amid rising public opposition against a Korea-U.S. FTA, the demand for the study results, which will defend the government’s FTA drive, has been increasing.
The ministry changed the study subject a bit as the KIEP is again expected to be the sole bidder.
The ministry requires bidders to compare and analyze economic damages before and after the Korea-Chile FTA, launched in 2004. It also required bidders to measure expected damages from a Korea-U.S. FTA by industry based on a study of the Korea-Chile FTA.
Despite the lack of applications, the ministry will push for the research project due to a tight timeline for a Korea-U.S. FTA signing.
Talks for a Korea-U.S. FTA will start in June after the both governments exchange first drafts the proposed agreement this month.