Korea's trade policy and performance in turbulent times

Abstract

This paper is a complementary study to gain a better understanding of Korea's recent trade performance in the context of the World Trade Organisation's (WTO) 2021 Trade Policy Review (TPR) on Korea. The TPR noted that Korea's external economic activities performed relatively well because Korea was able to limit the negative impact of recent turbulence in the global trade environment through enhanced regional cooperation and integration and reform since the East Asian financial crisis of the late 1990s. In addition, Korea's advanced information and communication technology has helped to mitigate external influences emanating from the global turmoil in the era of digitalisation. Evaluating Korea's recent trade performance, we found export's declining contribution to output growth and increasing vulnerability to external influences. Continuous efforts to widen and deepen regional cooperation together with efforts to rebalance value-creation activities are required.