An Analysis of Korea’s Environmental Goods Trade to China and its Policy Implications

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1. Foreword

Amid increasing implementations of various regulations and measures for environmental protection in many countries with the wid- ening awareness of environmental issues, the discussion of trade liberalization of environmental goods and services (EGS) in the inter-

national community has also been revitalized.

Since its establishment in 1995, the WTO (World Trade Organization) has discussed this subject in the trade and environment committee. One of the main issues is lowering tariff levels and the reduction and elimination of non-tariff barriers on EGS.

With regard to trade liberalization of environment-related goods in the Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting of 2012, it was agreed that discussions on trade liberalization will be focused on 54 items by HS 6-digit classification. Among these 54 items, the photovoltaic equipment solar panels, wind power generators, sorting crushers for recycling, liquid filters, and preci- sion equipment for environmental analysis are included. Moreover, even in the WTO, Japan, US, EU, South Korea, Switzerland, Singapore, Australia and Canada started negotiations in

January 2014 of a tariff reduction for new environment-related goods in volunteer countries in order to achieve both environmental protection and trade promotion.

While Korea’s exports of environmental goods and services remained under the level of 5 billion US dollars in the early 1990s, it soared to over 40 billion US dollars in 2013.

This article analyzes Korea’s EGS trade toward China according to the category of common OECD/WTO/APEC EGS classification.

Of course, recent trends and issues of trade liberalization of EGS among international institutions such as WTO and APEC are sum- marized, and the conclusion suggests some policy implications.

2. WTO and APEC’s recent Trends of Trade Liberalization of Envi- ronmental Goods

Regarding trade liberalization of the EGS area, the WTO has shown active movement, which has been natural considering the WTO’s main purpose for its foundation. The WTO had already installed a trade and environment committee (Committee on Trade and Envi- ronment) in the 1994 Marrakech Ministerial

An Analysis of Korea’s Environmental Goods

Trade to China and its Policy Implications

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Current Issues

Conference. And in the wake of 2001’s Doha Ministerial Declaration, the trade liberalization of environmental products has risen to one of the major issues in the WTO. In 2007, after the DDA (Doha Development Agenda) was resumed, the WTO has materialized its target of lowering tariff levels of EGS, and in 2011 it provided 153 items as environmental products. In January of 2014 in wake of the Davos forum, 14 countries and unions¹⁾ such as the EU, USA and China and others sought multilateral trade liberalization according to delay in the WTO DDA negotiations.

In July of 2014, the WTO launched a series of negotiations on environment commodity agreements (EGA). There were two rounds of negotiations. Firstly from July and Septem- ber of 2014, negotiations regarding work plans were held. In that course, Korea decided to participate in the next round of negotiations (from January to May 2015). Liberalization items cover the APEC’s 54 items plus items agreed upon among EGA participating countries. In Step 1, four discussions will be held according to category (eleven category items submitted by individual countries until March of 2015). And in Step 2, there will be negotiations on the agreement of the item list, and even if there is no time limit, the intermediary or final decision should be made by the end of 2015 at the ministerial meeting. The OECD

has not shown any dynamic action on trade liberalization of the EGS area until recently.

However, it made a notable contribution to the definition of EGS category. In 1997, the OECD made the first definition of the classification system and scope for the environment products (total of 161 items).

APEC has actively promoted trade liberalization of EGS. In the 1990s in APEC, the process of sectoral early trade liberalization (Early Voluntary Sectoral Liberalization;

EVSL) was discussed. Discussions addressed the environmental products as priority for early trade liberalization. In 1998, it selected 109 environmental products as tariff elimination targets under the selection criteria of items for environmental purposes and related necessary items by HS 6 digit. During 1995~2006, it was also a topic in the WTO DDA negotiations.

Finally in 2012, APEC agreed on 54 items by HS 6 digit to lower their effective tariff level to under 5% until the end of 2015.

The purpose of Annex C of Honolulu declaration is to organize the contents that- participating countries and economic regions have agreed upon regarding trade and invest- ment of environmental products and services.

According to this, countries must eliminate local procurement needs that inhibit transac- tions of environmental products, and refrain from the adoption of measures to favor the

1) Participating countries : Environmental Products Friends Group (US, EU, day, South Korea, etc. 9 countries) + China, Tai- wan, Singapore, Hong Kong, Costa Rica).

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domestic product. APEC’s decision, unlike the WTO, is not legally binding. But it also includes incentives to be carried out as part of the clean energy policy, and it also conforms to transparent government procurement policy of environmental products and services.

These discussions on trade liberalization of environmental products are being promoted in a variety of international negotiations, such as in the WTO and APEC. In addition, this also impacts other countries’ environmental policies that are also closely related with other free trade agreements, including the TPP

(Trans-Pacific Strategic Economic Partnership Agreement).

To reduce the tariff on environmental goods, it is necessary to specify which goods and services are related to the environmental industry. Among the WTO “the Environment Friends Group”, which includes Korea, the United States, EU, Japan, Canada, Swiss, Aus- tralia, New Zealand and Norway, submitted a list of items that every country should admit as environmental goods and insisted the liberalization should keep going under the list. There is no single and common category that is ad-

Table 1. Trade Liberalization in International Institutions

Major discussions and decisions on trade liberalization of EGS

WTO

- Install a trade and environment Committee (Committee on Trade and Environment) in the 1994 Marrakech Ministerial Conference

- In wake of the 2001 years Doha Ministerial Declaration, the trade liberalization of environmental products has become one of the major issues

- In 2007, after the DDA was resumed, WTO materialized the target of lowering tariff level of EGS - In 2011 provided 153 environmental products

- In January 2014, a joint statement was issued in wake of the Davos forum

· 14 countries/unions such as the EU, USA and China and others sought a multilateral trade liberalization according to delays in the WTO DDA negotiations

* Participating countries : Environmental Products Friends Group (US, EU, South Korea, etc. 9 countries) + (China, Taiwan, Singapore, Hong Kong, Costa Rica)

- In July of 2014 negotiations on environment commodity agreements (EGA) launched · two rounds of negotiations (July, September) discussion of negotiations work plan · Korea decided to participate in the second negotiation (2015 January~May) - Liberalization items

· the APEC’s 54 items + items agreed among EGA participating countries

· Step 1 : 4 rounds of discussions according to category (eleven category items submitted by individual countries until March of 2015)

· Step 2 : negotiation on agreement of item list (no time limit), but target to intermediary of final decision until the end of 2015 (ministerial meeting)

OECD - In 1997 first definition of classification system and scope for the environment products (161 items)

APEC

- In 1990s discussions on sectoral early trade liberalization (Early Voluntary Sectoral Liberalization, EVSL) included the environmental products as priority early trade liberalization

- In 1998 it selected 109 items of environmental products as tariff elimination targets

· Selection criteria : items for environmental purposes and related necessary items by HS 6 digit - During 1995~2006 : revolved around the WTO DDA negotiations

- In 2012, it agreed to lower 54 items’ effective tariff levels to under 5% until 2015 by HS 6 digit Source : Chang, Hyun-sook and et al. (2014), Recent Trade Liberalization Trend and Strategy for Korean Business, KITA, June, 2014.

MOTIE (2014), “Recent Issues on WTO EGA”, WTA EGA Workshop Material, 2014 November 24.

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Current Issues

mitted by every country. Since OECD made a pioneer definition of EGS in 1999, various items have been added to that.

Of course the items that are submitted and discussed in international bodies like WTO and APEC are the result from each country’s interest in the trade war in the world. As shown in Table 2 there are a variety of ranges in EGS.

3. Trade Analysis of Environmental Goods of Korea and China

Most EGS cannot be measured by a system of industrial classification and export/import trade statistics because of their commodity characteristics. Therefore, in this article EGS was dealt on the base of a range of environmental products that have been discussed

Table 2. EGS List by international Institution

OECD (1999) WTO (2007) APEC

2007 2012

Purpose

Economic policy analysis of environmental industry and defining EGS category

early trade

liberalization early trade

liberalization early trade liberalization

HS HS 1996 HS 2002 HS 2002

HS 2007 HS 2012

Items 164 (HS 123) 153 109 54

Items by HS Code 2-digit

84 (43) 90 (24) 28 (21) 85 (8) 73 (5) 39 (4) 96 (3) 22, 25, 32, 38, and 70 (2 at each) 29, 58, 68, 78, and 87 (1 at each)

84 (64) 90 (39) 85 (21) 73 (12) 56 (5) 53 (3) 76 (2)

39, 45, 63, 69, 70, 89, and 95 (1 at each)

90 (42) 84 (40) 85 (8) 69 (7) 70 (3)

39, 46, and 89 (2 each) 23, 56, and 59 (1 at each)

84 (23) 90 (19) 85 (11) 44 (1)

Items’ share according to environmental

media

1. Wastewater treatment (48%) 2. Air pollution

control (17%) 3. Measuring and

monitoring (12%) 4. Solid waste

management (11%)

5. Renewable energy (3%)

6. Other (9%)

1. Wastewater treatment (20%) 2. Measuring and

monitoring (20%) 3. Renewable energy

(18%) 4. Solid waste

management (16%) 5. Other (26%)

1. Measuring and monitoring (53%) 2. Wastewater treatment

management (10%) 4. Renewable energy

(10%)

5. Air pollution control (6%)

6. Other (7%)

1. Measuring and monitoring (30%) 2. Renewable energy

management (22%) 4. Wastewater

treatment (9%) 5. Air pollution control

(9%) Match items with

the APEC list 49 34

Source : Bang, Ho-kyung et al. (2013), EGS Trade analysis among Korea, China and Japan, KIEP, 2013. 8.

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since the mid-2000s in OECD and currently in APEC. The total number of items of EGA is 230, which could be divided into the three groups of pollution management, resource management and clean technology/products.

In the pollution management group, there are products that are related with pollution control, waste water management, solid waste management, improvement and cleanup of land, surface water and ground water, noise and vibration mitigation, environmental monitoring, analysis, and related products of evaluation. The resource management group covers supply of water, recyclable materials, renewable energy facilities, heat/energy sav-

ings and sustainable agriculture/fishery. In the clean technology/product group, there are clean technology-related products such as, CFC-substitutes and hydrogen peroxide and the like. Based on these OECD/APEC common 230 items, this article addresses 170 items that have shown some practical records on trade between Korea and China.

Korean EGS trade with China has grown since 1992 amid the normalization of diplo- matic relations. In 2013, Korea’s exports were recorded as 8.14 billion US dollars and the import value reached 4.64 billion US dollars.

This export figure was about 30.6 percent of the total exports of Korea and the import

Table 3. Korea EGS Exports to China

Unit : M US , %

　 1995 2000 2005 2010 2011 2012 2013 CAGR

(1995~

2013) Pollution management 398.1 602.0 2,078.9 3,211.4 4,192.9 4,359.4 6,023.9 16.3

Air 39.5 57.0 204.0 300.1 404.5 350.1 662.4 17.0

Remediation 0.2 2.1 64.8 3.6 5.7 4.5 6.3 21.7

Noise/vibration 2.2 2.5 30.9 305.1 498.4 616.0 716.2 38.0

Water 152.6 155.3 466.1 600.7 849.9 837.9 1,278.6 12.5

Measure/monitor 30.9 38.2 250.3 633.4 774.7 955.9 1,466.7 23.9 Solid waste 172.8 346.9 1,062.7 1,368.6 1,659.8 1,595.0 1,893.7 14.2 Resource management 29.1 33.2 251.3 1,632.8 2,124.4 2,436.4 2,079.0 26.8

Water 0.1 2.0 65.1 1.8 3.7 11.6 18.2 36.7

Heat/energy saving 24.7 20.9 84.1 185.9 210.0 157.3 184.3 11.8 Renewable energy

equipment 4.1 9.9 102.0 1,443.9 1,908.2 2,265.2 1,874.1 40.5 Sustainable

agriculture/fishery 0.2 0.5 0.2 1.3 2.5 2.3 2.3 15.0

Clean Tech/

product Clean product 1.4 7.5 27.7 61.5 54.1 43.4 39.1 20.3

Total 428.6 642.6 2,357.9 4,905.7 6,371.4 6,839.2 8,142.0 17.8 Source : Calculation from UN DB (COMTRADE).

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Current Issues

record showed 17.2% of total imports of Korea. Therefore, Korea’s EGS trade balance to China has shown continuous black figures just like the case of most other manufactured products. In 2013, it was as good as 3.5 billion US dollars.

Let us look into more details in the export area through environmental media. Traditional pollution management-related exports domi- nated EGS exports. In 2013, it recorded a level of 6.0 billion US dollars. In the pollution management are, a noise/vibration showed an im- pressive growth rate since the mid-1990’s, but its real figures remained at low levels because of its characteristics of recently-rising business

and early-stage of regulation. Traditionally, solid waste management business has been a top area. Its exports of Korea to China recorded about 1.9 billion US dollars in 2013 and recent annual growth rate has shown fairly a good level of 14%. The second largest area was the measure/monitor area, which showed good results of absolute figure (about 1.5 billion US dollars) and growth rate (about 24%). Water is one of the steady market areas. Exports recorded about 1.3 billion US dollars in 2013.

In the resource management area, renewable energy equipment has shown good results in absolute figure and growth rate. In 2013, export figures were about 1.9 billion US dollars.

Table 4. Korea EGS Imports to China

Unit : M US , %

　 1995 2000 2005 2010 2011 2012 2013 CAGR

(1995~

2013) Pollution management 64.2 168.6 1,133.0 2,001.8 2,436.8 2,663.3 2,912.3 23.6

Air 6.2 32.0 121.1 277.0 364.6 403.2 422.1 26.5

Remediation 0.5 9.3 191.1 15.6 16.6 11.8 12.7 20.2

Noise/vibration 0.7 3.5 15.0 112.8 147.3 126.4 97.6 32.1

Water 32.8 70.8 499.8 707.5 832.2 928.0 1,108.9 21.6

Measure/monitor 13.3 24.4 130.1 387.3 541.8 574.4 583.7 23.4

Solid waste 10.9 28.6 176.0 501.7 534.3 619.4 687.2 25.9

Resource management 48.1 78.1 391.7 1,099.5 1,323.0 1,517.7 1,721.6 22.0

Water 0.0 7.0 182.1 8.5 12.9 11.9 24.9 10.3^*

Heat/energy saving 1.1 12.8 63.8 171.9 208.3 192.2 212.0 33.8

Renewable energy

equipment 32.2 49.4 139.6 918.9 1,101.4 1,313.3 1,483.8 23.7 Sustainable

agriculture/fishery 14.7 9.0 6.1 0.1 0.4 0.3 0.8 -14.7

Clean Tech/

product Clean product 1.6 2.0 7.8 6.5 8.7 9.9 8.8 10.0

Total 113.8 248.6 1,532.5 3,107.8 3,768.6 4,191.0 4,642.7 22.9 Source : Calculation from UN DB (COMTRADE).

Note : *2000~2013.

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It has shown 40.5% of the annual growth rate since the mid-1990s. In the clean technology area, exports still remain at a low level. In 2013, its total exports were only about 40 million US dollars.

Korean EGS imports from China have shown continuous increase since the mid- 1990s. The annual increase rate recorded over the 20% level in those three areas. Naturally traditional pollution management area’s import figures were over half the total. In 2013, it was about 2.9 billion US dollars. Within that area, water-related items were over the one thirds of the total. Although increasing pace noise/

vibration was the highest, all media’s rates of

increase were over 20%. In the resource management area, the recent trend of renewable energy boom can be seen. Its import figure was about 1.5 billion US dollars in 2013, which was almost 90% of that area. In addition, clean technology related products were only 8.8 million US dollars in 2013.

As already mentioned, Korea’s EGS trade balance has shown steady and big black numbers in all of three areas since the mid-1990s.

In total, it was about 3.5 billion US dollars in 2013, with pollution management at 3.1 billion US dollars, resource management at 0.4 billion US dollars and 30 million US dollars each. However, there were some trade deficit

Table 5. Korea EGS Trade Balance to China

Unit : M US , %

　 1995 2000 2005 2010 2011 2012 2013

Pollution management 333.9 433.4 945.9 1,209.6 1,756.1 1,696.1 3,111.6

Air 33.3 25.1 82.9 23.1 39.9 -53.1 240.3

Remediation -0.3 -7.3 -126.3 -12.0 -10.9 -7.3 -6.4

Noise/vibration 1.5 -1.0 15.9 192.2 351.1 489.5 618.6

Water 119.8 84.5 -33.7 -106.8 17.7 -90.1 169.7

Measure/monitor 17.6 13.8 120.2 246.1 232.8 381.5 883.0

Solid waste 161.9 318.3 886.8 866.9 1,125.5 975.6 1,206.5

Resource management -19.0 -44.9 -140.3 533.3 801.3 918.7 357.4

Water 0.1 -5.0 -117.0 -6.7 -9.2 -0.3 -6.7

Heat/energy saving 23.6 8.1 20.3 13.9 1.7 -34.9 -27.7

Renewable energy

equipment -28.1 -39.5 -37.6 524.9 806.8 951.9 390.3

Sustainable

agriculture/fishery -14.5 -8.5 -6.0 1.2 2.0 2.0 1.5

Clean Tech/

product Clean product -0.2 5.5 19.9 55.0 45.5 33.5 30.3

Total 314.8 394.0 825.5 1,797.9 2,602.9 2,648.2 3,499.3

Source : Calculation from UN DB (COMTRADE).

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Current Issues

areas in sub sectors. In the pollution management area, remediation related products have shown continuous red letters since the mid- 1990’s. And in the resource management area, water and heat/energy saving related products showed trade deficits. While water related products have been a steady red letter items, heat/energy saving related products were recently reversed into a trade deficit since 2012.

It is natural that in the resource management area, renewable energy equipment showed fairly a result of trade surplus.

In addition, trade structure can be analyzed whether one country specializes in exports or imports in consideration of both exports and imports. We can see through the trade special-

ization index, in which net trade numbers (export minus import) are divided by total trade figures (exports plus imports). If the index is 0, it is a moderate comparative advantage, but if one refers to a state of full export specialization, that is, imports is none, and if it is -1, it shows that imports only without exports. This index is also used in the international competitiveness index; if it ranges over 0 and below 1 it shows some international trade competitiveness, and if it shows below 1 and close to -1, it shows low trade competitiveness.

Since the mid-1990’s, Korea’s EGS trade competitiveness results are shown in Table 6 in the trade specialization index is. For air pollution control related products, the figure

Table 6. Korea EGS Trade Specialization Index to China

　 1995 2000 2005 2010 2011 2012 2013

Pollution management 0.7223 0.5625 0.2945 0.2320 0.2649 0.2415 0.3482

Air 0.7299 0.2816 0.2552 0.0401 0.0518 -0.0705 0.2216

Remediation -0.4301 -0.6391 -0.4935 -0.6262 -0.4896 -0.4492 -0.3385 Noise/vibration 0.5372 -0.1630 0.3463 0.4600 0.5438 0.6594 0.7601

Water 0.6465 0.3738 -0.0349 -0.0816 0.0105 -0.0510 0.0711

Measure/monitor 0.3989 0.2200 0.3161 0.2411 0.1769 0.2493 0.4306 Solid waste 0.8816 0.8477 0.7159 0.4635 0.5129 0.4406 0.4675 Resource management -0.2457 -0.4035 -0.2182 0.1952 0.2324 0.2323 0.0940 Water 1.0000 -0.5587 -0.4734 -0.6548 -0.5568 -0.0144 -0.1557 Heat/energy saving 0.9129 0.2411 0.1369 0.0390 0.0040 -0.0998 -0.0699

Renewable energy

equipment -0.7736 -0.6669 -0.1556 0.2222 0.2681 0.2660 0.1162 Sustainable

agriculture/fishery -0.9748 -0.8988 -0.9418 0.8335 0.7047 0.7559 0.4702 Clean

Tech/

product Clean product -0.0546 0.5843 0.5597 0.8091 0.7240 0.6272 0.6320

Total 0.5803 0.4421 0.2122 0.2244 0.2567 0.2401 0.2737

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is about 0.22 to denote export-orientation toward China, compared with 0.082 as in toward the whole world. In the case of water related products, 0.017 means slight export-competitive toward China compared with -0.0596 toward the whole world. In the case of the waste management area, the figure is 0.47, which means a fairly big number of trade surplus compared with 0.13 as in toward the whole world.

We can look into the phenomenon that-

shows exports and imports coincidently. It is called as intra-industry trade, and it can be measured through Grubel-Lloyd Index.²⁾ The GL Index ranges between 0 and 1 and if it is 0, either exports or imports is 0, which means perfect intra-industry trade. And if it closes to 1, it means the item’s share is bigger than that of total trade volume. If it is exactly 1, it shows that exports are exactly equal to imports. The GL Index of Korea’s EGS to China has remained at a fairly high level since the mid-

2) Where export is Xi and import is Mi, Grubel-Lloyd Index (GLi) is defined as follows.

(Xi +Mi) - |Xi – Mi| |Xi - Mi|

GLi = { --- } = 1 - --- (Xi + Mi) (Xi + Mi)

Table 7. Korea EGS Intra-industry Division of Labor (Grubel-Lloyd index) to China

　 1995 2000 2005 2010 2011 2012 2013

Pollution management 0.2777 0.4375 0.7055 0.7680 0.7351 0.7585 0.6518

Air 0.2701 0.7184 0.7448 0.9599 0.9482 0.9295 0.7784

Remediation 0.5699 0.3609 0.5065 0.3738 0.5104 0.5508 0.6615 Noise/vibration 0.4628 0.8370 0.6537 0.5400 0.4562 0.3406 0.2399

Water 0.3535 0.6262 0.9651 0.9184 0.9895 0.9490 0.9289

Measure/monitor 0.6011 0.7800 0.6839 0.7589 0.8231 0.7507 0.5694 Solid waste 0.1184 0.1523 0.2841 0.5365 0.4871 0.5594 0.5325 Resource management 0.7543 0.5965 0.7818 0.8048 0.7676 0.7677 0.9060

Water 0.0000 0.4413 0.5266 0.3452 0.4432 0.9856 0.8443

Heat/energy saving 0.0871 0.7589 0.8631 0.9610 0.9960 0.9002 0.9301 Renewable energy

equipment 0.2264 0.3331 0.8444 0.7778 0.7319 0.7340 0.8838 Sustainable agriculture/

fishery 0.0252 0.1012 0.0582 0.1665 0.2953 0.2441 0.5298

Clean Tech/

product

Clean product 0.9454 0.4157 0.4403 0.1909 0.2760 0.3728 0.3680

Total 0.4197 0.5579 0.7878 0.7756 0.7433 0.7599 0.7263

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Current Issues

1990s. In 2013 air pollution management related products showed 0.77 and water related products were 0.93. Those signify absolute sta- tus in intra-industry trade. Contrastingly in the waste management area, it showed 0.53 which means a relatively low level in intra-industry trade but double compared with 0.28 in the mid-2000s.

4. Policy Implications

It is somewhat frustrating that the EGS trade liberalization movement seldom receives any popularity compared with the situation in Ja- pan. In Japan, APEC’s recent movement to trade liberalization of EGS has provided an opportunity to recognize the importance and usefulness of the environmental goods trade to the public. In fact, just right after the agreement was announced, many mass media discussed the environmental goods trade as related ar- ticles and reports were published. Growing public interest reinforces the significance of liberalization, and enhances academic achieve- ments. In contrast, in Korea which has absolute dependence on trade (recently almost 100%, where its GDP is divided by exports plus imports), the issue is somewhat strictly confined to related business and governmental bodies.

Therefore, more effort for diffusion of infor- mation is needed.

As well-known, EGS has somewhat complex characteristics of commodity. When it comes to the concept of environmental equipment,

people can easily be reminded of facilities such as incinerators and waste water treatment facilities. Yet, they cannot be easily caught into the system of standard classification of commodity or trade classification because they are traded and installed in the basis of plants that are involved with various service activities. In other words, most environmental facilities like incinerators and waste water treatment facilities are positioned in the latter part of the value chain and service activities such as installation, operation and after care service.

However, because the trade liberalization issue of EGS should be proceeded on the basis of the system of commodity in international bodies such as WTO and APEC, most EGS items consist of general purpose items such as valve, frenzy and tubes and the like. It means they are mostly not the final products, but intermediate goods such as components and materials. Therefore the governmental body at hand should necessarily be the department of commerce or similar. In Korea, MOTIE (Ministry of Trade, Industry and Energy) is the main governmental body for the issue. There- fore, Korea’s position for international discussion of trade liberalization of EGS should not be strictly confined to areas directly related to environmental facilities but widely cover the general competitiveness of its related business- es in a broad sense.

This means the trade liberalization issue should not be narrowly confined to the environmental industry but extend to the upper

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level of industry in which items are involved.

Therefore, when the governmental bodies or industry organizations gather opinions regarding issues they should expand their field of consideration to include, for example, the de- mand side.

Furthermore, it is desirable to extend the time span to a longer term. If opinions are gathered on a short term, interest-oriented basis, it is im-

possible to catch the potential items that are not present now but may be presented in the long term. Thus, the trade liberalization issue should be dealt with on a more dynamic and long term basis, even if it is a very complicated job.

Dae-Jong GWAK Research Fellow New Growth Industry Research Division [email protected]