Abstract
The Korean government’s engagement in FTAs since the late 1990s has been enthusiastic. As of 2012, the Korean government concluded FTAs with small trading partners such as Chile, Singapore, EFTA, ASEAN, India, Peru, and Turkey, and major counterparts such as the European Union (EU) and the United States as well. However, the degree of each of the Korean administrations’ engagement in FTAs has shown discernible differences: While the Kim Dae-jung administration passively engaged in FTAs, the Roh Moo-hyun administration was proactive in that engagement. What explains the shift from the Kim administration’s passive FTA policy to the Roh administration’s comprehensive multi-track FTA policy? This article argues that the appreciation of the Korean won since 2001 made Korean exporters lose their price competitiveness in the global market, thereby forcing the Roh administration to offset Korean exporters’ lost price competitiveness by formulating a comprehensive multi-track FTA policy, with huge side payments for politically sensitive import-competing sectors.
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