Us-korea Free Trade Agreement (nafta): Motivation And Impact

In the recent years, bilateral FTA has been a prevailing economic presence all over the world. On Feb 6th, 2006, officials of United States and Republic of Korea announced to launch the negotiation on their bilateral Free Trade Agreement.US-Korea FTA was listed in the agenda on the background of the changing situation of US-Korea trade relation and the rapid development of regional economic cooperation. Negotiations on the agreement were completed in April, 2007, which includes various issues such as agriculture, textile, automobile and so on.The motivation of US-Korea FTA lies in two aspects. In the economic sense, because of the problems of the multi-lateral free trade system, bilateral FTA is becoming a popular trend, in which US-Korea FTA is an inevitable result. From the non-economic prospective, US-Korea FTA serves the East Asia strategic policy of United States.The free trade agreement between United States and South Korea will have important impacts on the political and economic situation in the region of East Asia. As for United States and South Korea, this agreement may bring them some benefits such as enlargement of trade volume and enhancement of competitiveness, etc. As for China and Japan, the Sino-Korea and Japan-Korea economic ties may be challenged by trade diversion effect generated from the US-Korea FTA. But on the other hand, the exemplary effect may also make this agreement an external promoting force for the free trade negotiation among the three countries. From the perspective of the entire Asia-Pacific region, US-Korea FTA serves as an important part of the Asia-Pacific FTA plan of United States.