An Analysis of Korea-UK FTA Improvement Negotiations and the New Trade Environment

Abstract

Purpose – The aim of this analysis is to provide implications for trade practice by analyzing FTA progress in the digital economy and trade field with IPEF through FTA improvement negotiations between Korea and the UK, and an analysis of the new trade environment. Design/Methodology/Approach – The annual export/import growth rate (year-on-year) before and after the Korea-UK FTA was concluded and forecasts for 2022 and 2023 were reviewed. This data from 2000 to 2021 are based on the Economic Statistical System of the Bank of Korea. It recorded 33.20% in 2021, the second highest growth rate since the 2000s, after recording 36.95% in 2004. It was estimated through the model of ARIMA (1, 1, 0) in the case of 2022 and 2023. After the Korea-UK FTA was concluded, it was found that the trade volume of Korea-UK combined exports and imports increased. Findings – In the future, it is expected that joint cooperation and R&D investment in high-tech and hightech industries will be more actively developed through improvement negotiations in the fields of SCM, digital economy, and trade. Research Implications – The US is currently emphasizing US production of optical fibers, semiconductors, and electric vehicles as well as key parts in relation to the global supply chain. Therefore, the Korea-UK FTA improvement negotiation and framework require joint cooperation and R&D investment in the reorganization of the US global supply chain in cutting-edge industries, including US semiconductors, science law, and inflation reduction laws.