Business Sustainability Initiatives in the USA and Canada

Despite its limited natural resources and small domestic consumer market, the Republic of Korea (hereafter Korea) has grown into one of the world's largest economies, leveraging globalization and global trade liberalization through the General Agreement on Tariffs and Trade (GATT) system. 1 Even in the midst of the current international financial crisis, Korea continues to advocate an open-trade system and has pushed on with the restructuring and domestic reforms that trade liberalization requires. It also actively participates in bilateral free trade agreements (FTAs) as well as international trade negotiations under the Doha Development Agenda (DDA). Korea's assessment of the benefits of an open economy has improved significantly in recent years. With its improved global economic standing, Korea has understood that the principle of reciprocal reciprocity must be applied to trade liberalization. When Korea was a developing country, it only opened up a small portion of its market in exchange for foreign concessions. Today, however, it is well aware that such an action will not be supported internationally. Lee Myung-bak's government, which was installed in February 2008, aimed to build a "global FTA network" as its primary foreign-trade policy. The government's position is that it will execute the FTA that Korea has signed with the United States (US), as well as Korea's FTA with the European Union (EU), which is already nearing completion. It also aims to discuss commencing negotiations for bilateral free trade agreements with Japan, the People's Republic of China (PRC), and Russia, as well as with the Southern Common Market of Central and South America (better generally known as Mercado Comun del Sur, or Mercosur). 

It intends to ameliorate the country's weakening trade climate as a result 

of the recent global financial crisis, as well as to strengthen the country's economic growth momentum, by signing free trade agreements.3 There are numerous internal pressures opposing the promotion of FTAs. Protectionists argue that opening up the economy and liberalization are harmful, whereas protectionism serves the national interest. As a result, the former Roh Moo-hyun government faced political challenges in negotiating FTAs with substantial trade liberalization provisions. Korea's first free trade deal with Chile allowed for numerous exclusions in a variety of areas, and subsequent agreements were likewise less complete and inconsequential. After multiple FTA experiences, Korea was able to reach an advanced, high-standard agreement. Its free trade agreement with the United States might be considered the world's most comprehensive in terms of market opening, service, investment, and trade rules (Cheong 2007, 2008, 2009). While the Korea-US FTA has yet to be implemented due to delayed approval by both nations, Korean businesses anticipate significant economic potential once it is implemented. The FTAs that are now being implemented in Korea are claimed to benefit only a few firms. The government has widely collected Korean interests and viewpoints, but it has faced challenges in representing those in its FTAs. It has pushed for the conclusion of FTAs but has been less successful in delivering knowledge about how to use existing FTAs, which is required by businesses. This study summarizes key findings from previous surveys4 and presents new evidence from a July-August 2008 survey of 120 Korean firms. 

which investigated critical questions about FTA utilization

perceived costs and benefits, perceptions of multiple rules of origin (ROOs), and policy and institutional support mechanisms for FTAs.5 According to the 120 firm samples, just 25 firms currently employ FTAs, whereas 65 do or intend to use them.6 There are numerous reasons why just a tiny percentage of businesses use FTAs. The most significant hurdle to using FTAs is anticipated to be the low tariff preference of Korean FTAs (43 enterprises), followed by a lack of information about FTAs (41 firms). Others include complex rules of origin (18 enterprises), administrative costs (13 firms), and non-tariff barriers (5 firms). Although the Korean government's vigorous promotion of free trade agreements has been widely praised, this article contends that the government's FTA promotion mechanism should be supplemented. Furthermore, the government should push forward plans to improve firms' use of existing FTAs. This article also investigates how the Korean government pushes FTAs forward and evaluates the real terms of the FTAs as used by firms. Finally, it proposes strategies for increasing firms' use of existing FTAs. 2.1 Korea's System of Promoting FTAs7 This section gives general information about the key elements of Korea's free trade agreements. While Korea did not have a specific model agreement for its FTA.

the general framework of the agreement texts Korea pursued in its negotiations 

with Chile, Singapore, and the United States were modeled after the text of the North American Free Trade Agreement (NAFTA), though the specific structure and provisions of each agreement varied to reflect different negotiating needs. The EFTA-Singapore agreement served as the basis for the draft language of an agreement with the European Free Trade Association (EFTA) at the outset of negotiations. The FTA between the Association of Southeast Nations (ASEAN) and Korea is structured similarly to the ASEAN Free Trade Area (AFTA) and the ASEAN-PRC FTA. Korea is steadily compiling a library of agreement texts to aid in the formulation of its own agreement pattern as it gains experience in free trade agreements. For example, the wording of the Korea-US (KORUS) Free Trade Agreement served as a model for its FTA with the European Union. Korea, on the other hand, has maintained a high level of consistency in terms of substantive components of free trade agreements. First and foremost, it has pursued comprehensive free trade agreements (FTAs) that encompass all sectors and virtually all trade in accordance with Article XXIV of GATT 1994 and Article V of the General Agreement on Trade in Services. Second, Korea has gradually enhanced the quality of its free trade agreements in terms of goods and services liberalization.

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