The Effect Of The Free Trade Agreement On Korea’s Air Cargo Transport Market

Globalization and regional economic integration have become the current trend of global trade which has been seriously effected on Korea and Northeast Asia’s economy. Changing of world-economy is contributing a whole world-trade liberalization and regional economic blocking.Korea has been negotiating a multiple Free Trade Agreement on rising countries as well as leading countries. For these reasons, A discussion has been carrying on a FTA between China and Korea.Korea has cultural and economic relationship as well as geographical. China has become a trade partner since establishing diplomatic relations in1992. Making an agreement with China, is very important for Korea economy that oriented by export-led industry and it is also significant for securing stabilized market and extending influence on Asia. In this situation, International logistics are being magnified and an air cargo is having a higher ratio.The world air cargo market system will be grown especially with Northeast Asia as the center.This research analyzes an effect of an air cargo transportation if China and Korea make an agreement on FTA. For analyzing an air cargo transportation and economic effect by agreement on FTA, The research will be begin investigating the cause of background and current situation and analyzing the quantity of goods transported in Korea and setting a strategy and implications.We are predict that an air cargo transportation market will be expanded according to the current trend of distribution if making an agreement China between Korea.By using demonstration analysis, I concluded the effect according to FTA by Intra-Industry Trade’s GL index number, tariff rate and gravity model (that trade organization between China and Korea.)I could foresee the trade size according to Regional Trade Agreement and confirmed an influence by national trade scale in RTA which based on GDP, population and distance that key variable be used gravity model as explanatory variable. Also I analyzed the effect on trade volume about each item when tariff elimination will be valid by using export and import price index.