Abstract:
The paper uses economic and energy data analysis and econometric modeling to study the prospects and challenges of Korea’s 2003 FTA Roadmap (MOFAT 2013) in the form of potential comprehensive partnerships with its major trade and energy partners. It first reviews Korea’s international economic and trade relations in recent years with a focus on its major merchandise export destinations and energy imports, and their association with the country’s economic performance. A causal model of endogenous growth, gravity trade and energy imports for Korea in an economic integration theory framework (Tran 2012; Tran and Limskul 2013) is then developed to investigate the structural effects between these sectors. Empirical findings by system estimation are finally used to provide predictive policy implications for comprehensive partnerships between Korea and major resources-rich countries in the Middle East and potentially Iran.
Machine summary:
"In the context of this perception and prediction and Korea’s interest, since the establishment of its FTA Roadmap in 2003 (MOFAT 2013), in expanded regional economic and trade partnerships in an increasingly globalised economy, the paper is a rigorous study of Korea’s international economic and trade relations in the specific growth-oriented areas of merchandise exports and energy imports in recent years and of how these structural relations, if empirically validated, will likely affect Korea, its main trading partners, and its major energy-supplying economies in the Middle East and possibly Iran.
6. Implications for Korea’s Economic and Trade Relations with the Middle East and Iran In the preceding sections, we have developed the GTE model to empirically investigate the causality of Korea’s economic performance in relation to its non-oil merchandise trade with all of its trading partners and energy imports from major Middle East (including Indonesia) countries in the framework of currently widespread EI and RTAs. The model’s main hypotheses being tested would provide useful evidence to informed debate and analysis of Korea’s focus on economic and trade relations expansion with its trading partners (MOFAT 2013) and how this would be transmitted through different sectors of the economy."