Formation and development of FTA network: South Korean case

Abstract

The article focuses on formation and evolution of South Korean Free Trade Agreements (FTA) network. Republic of Korea's case is an interesting example of the export-led economic growth that was spurred by trade liberalization process. The authors use the methods of regression and network analysis to reveal the specificity in South Korean approach setting up links with distant and bigger economies than South Korea, instead of integration with similar and geographically close countries. Also, the authors identified 4 periods in S. Korean trade policy and analyzed them in terms of trade partners. The classification revealed the South Korean trade partners preferences at the different periods of time. Finally, the authors examined the evolution of Korean FTA network that enabled forecasting further clusterization and the likely network increase by 30 percent. Moreover, based on these observations the authors draw a conclusion about a cross-zone network phenomenon when country A uses the existing free trade zone of the country B to get access to the markets of FTA partners of the country B.