Finding beneficiaries: trade adjustment assistance system in South Korea

• DOI: https://doi.org/10.1108/JITLP-03-2017-0010
• Date: 19 June 2017
• Pages: 92-105
• Published date: 19 June 2017
• Author: Joon-heon Song
• Subject Matter: Strategy,International business,International business law,Economics,International economics,International trade

Finding beneficiaries: trade

adjustment assistance system in

South Korea

Joon-heon Song

School of Business and Commerce, Tokyo International University, Saitama, Japan

Abstract

Purpose –The purpose of this study is to explore the essential cause for the policy failure of Trade

AdjustmentAssistance (TAA) in South Korea.

Design/methodology/approach –To substantiate the claims made for the failure of the policy, this

paper focuses on the differences in policy preferences among the government ministries and agencies

involvedin TAA.

Findings –The failure in the TAA policy, according to this study, was attributed to the conflicts and

miscoordination arising from the differences in policy preferences among government ministries and

agencies. To rectify this failure,the South Korean government had to revise its laws and regulations several

times over a shortperiod.

Originality/value –Drawing on the analytical framework of the literature on policy failure, this paper

examines the causal relationships between outcomes of TAA policy and the conflicts or miscoordination

among governmentbodies at each stage: initiatives and planning, implementationand operation of the policy.

Keywords South Korea, Free trade agreement, Policy failure, Policy preferences,

Trade Adjustment Assistance (TAA)

Paper type Research paper

1. Introduction

In 2006, the South Korean government introduced the TradeAdjustment Assistance (TAA)

system in the course of implementing the proactive free trade agreements (FTAs) policy.

The goal of the TAA system is to assist firms and workers adversely affected by the FTAs.

According to the “New Trade Roadmap”releasedin June 2013, the government plans to use

TAA actively to support domestic industries. With a growing number of FTAs, it was

widely recognized that vulnerable domestic sectors required assistance programs for the

early conclusion of FTA negotiations and further trade liberalization. Leaving aside

arguments about the validity of government interventions, the implementation and

successful operation of TAA system still forms an important component of South Korea’s

FTA policy.

However, the TAA system has been considered a policy failure in South Korea (Heo,

2013a), although there were expectations of it being an effective remedy for the victims of

trade liberalization. According to government figures, only 82 firms were designated as

beneficiaries of TAA in a span of approximately 10 years. Besides, there hasbeen no formal

support so far for the workers. In the initial phase of the introductionof TAA, the poor use of

the system was attributed to a lack of awareness (Jeon and Cheong,2010;Cheong and Cho,

2011). Later, the extremely limited eligibility and complicated application procedures for

benefits were cited as the reason for its non-use (Choi, 2011;Song, 2011;Cheong and Cho,

2011;Kang, 2013). Regrettably, despite the lapse of time and several amendments to the

JITLP

16,2

92

Received 22 March 2017

Revised 8 May 2017

Accepted 9 May 2017

Journalof International Trade

Lawand Policy

Vol.16 No. 2, 2017

pp. 92-105

© Emerald Publishing Limited

1477-0024

DOI 10.1108/JITLP-03-2017-0010

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