Chapter 7: Increasing Interaction Between Investment and Trade in Korea
Jaemin Lee 1. INTERACTION BETWEEN TRADE POLICY AND INVESTMENT POLICY IN KOREA: TWO DISTINCT STAGES AND CURRENT SITUATION A government’s foreign investment policy and trade policy have close connection and affect each other.1 In fact, the close relationship between the two is not a new finding, but has long been confirmed since the inception of the General Agreement on Tariffs and Trade (“GATT”) in 1947.2 In fact, foreign investment issues have taken an increasingly important role in the world trade regime.3 Korea, however, has traditionally adopted a dichotomy approach in which trade policies and investment policies are treated as if they covered their respective sectors only: trade policies and investment policies have been reviewed and formulated on their own merits without necessarily taking into account the overlapping elements between the two. As such, Korea’s trade policy has focused on how to 1 Investment by domestic companies in the domestic market could also carry implication for the international trade. Likewise, international trade policies could also carry similar implication for domestic investment by domestic companies. For this chapter, however, the term “investment” is used only to mean and cover “foreign investment”: in other words, foreign investment in the Korean market or Korean investment in the foreign market. 2 See http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey3_e.htm. (It is said that originally the trade rules and investment rules were supposed to stand hand-in-hand); Singapore Ministerial Declaration, WT/MIN(96) (December 18, 1996), established a Working Group on the Relationship between Trade and Investment. The Working...
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