Expanding Horizons: Opportunities for Exploring the Korean EconomyIrina A. Korgun
Lead research fellow
Institute of Economics, Russian Academy of Sciences, Moscow
I specialize in the Korean economy and began my career by researching the Korean development model, with a specific focus on the role of trade. The relationship between trade and economic growth is a pivotal aspect of developmental studies that has garnered significant attention from both the academic community and policy-makers. The question of whether trade causes growth and development has been explored by notable economists such as Arthur Lewis, one of the founding fathers of development economics; Harvard professor Dani Rodrik; and Nobel laureates Paul Krugman and Joseph Stiglitz. Korea is often cited as a classic example of a country that has benefitted from trade and an open international trading system. By aligning industrial policy and institutional changes with an active trade strategy in the second half of the 20th century, Korea successfully transformed into one of the world’s most advanced nations with a high potential for innovation. Even today, Korea remains highly dependent on trade that in many ways shapes the Korean mindset.
Subsequently, my research pivoted towards Korea’s trade policy. As the country pursued its free trade agreement (FTA) policy, the impact of trade on its economy took on a new dimension. FTAs reduced trade barriers between agreement parties to a level beyond that of their respective commitments in the World Trade Organization (WTO), thus opening space for the further expansion of mutual trade. In this regard, I began exploring questions such as what added value FTAs bring to Korea, what benefits each individual FTA produces, and how trade policy is formulated in order to maximize FTA benefits. As of December 2023, Korea had 21 FTAs with a total of 59 countries. As a policy tool, FTAs helped Korea achieve several strategic objectives: increasing the value of exports, entering new markets, promoting the export of new products and services to facilitate ongoing economic restructuring, and strengthening relationships—particularly those with developing countries. As a result of this active trade policy, Korea has increased its international influence.
In light of the ongoing digital transformation, issues related to the use of technologies in trade have gained attention from businesses and governments. Besides e-commerce, issues related to the transfer of data, privacy, cybersecurity, and AI are also changing the policy environment. My recent project, supported by the Korea Foundation, focused on digital trade between the European Union (EU) and Korea. Having enjoyed multiple benefits from this mutual trade agreement, both sides are now looking to update it to better address challenges of the digital era. In my project I focused on identifying the components of and major trends in EU–Korea digital trade. My research paid attention to both online trade—i.e., that which takes place on e-commerce platforms—and trade in information and communication technology (ICT) products essential to building digital trade infrastructure. Digital trade is set to play an important role in shaping the future of economic relations between the EU and Korea. Ongoing efforts seek to open negotiations around an EU–Korea digital trade agreement that would address the issues outlined above.
I identified several key reasons driving collaboration between Korea and the EU in digital trade. Firstly, the escalating conflict between China and the United States is reshaping international trade, and disruptions in technological supply chains could adversely affect dependent actors like the EU and Korea. Secondly, security concerns and safety issues in the largely unregulated digital space present challenges that can only be overcome through joint efforts. Thirdly, the rapid pace of digital technology development can concentrate competitive advantages, making joint collaboration essential for mutual and beneficial sharing of technologies. Moreover, the proliferation of digital technology creates vulnerabilities, necessitating collective efforts in regulation. Synchronizing regulation between the EU and Korea will optimize costs, fostering a more productive multi-level partnership in the long term.
In conclusion of this short essay, I express gratitude to the Korea Foundation for their continuous support throughout the years. The 2023 KF Fellowship for Field Research allowed me to embark on a new line of research that will expand the scope of Korean economy studies and lay the groundwork for future collaborations with colleagues from different countries. My sincere thanks go to all staff members at the Korea Foundation’s Moscow and Jeju offices, whose efforts were indispensable to the success of my research fellowship.
KOREA FOUNDATION
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