1REGIONAL FRAGMENTATION OR INTEGRATION••Soojong Kwak
Oct.12, 2023

CONTENTS
1. Introduction​
2. Annual Economic Growth

3. Economic Adjustment and Policy Direction
4. Economic Prospects
5. ​Policy Recommendation

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1. INTRODUCTION“Mega-regional” trade agreements in EastAsia

2. ECONOMIC GROWTH5

ECONOMIC GROWTHFirst, Gross Domestic Product (GDP): ROK’s GDP has grown significantly over the past few decades. As of 2022, the country's GDP wasapproximately 1.7342 trillion USD, making it the 13th largest economy in the world. However, recently, it is facing slow down of theeconomy. IMF expects its 2023 GDP growth rate would be 1.4%

Second, unemployment rate: ROK’s unemployment rate has fluctuated over the years, but has generally remained relatively low. In March
2023, the unemployment rate was 2.7%.

Third, the domestic consumer price inflation rate has continued a noticeable slowdown since the second half of last year, recording 2% inJune and July. The core inflation rate also shows a relatively mild decline compared to consumer prices. Nevertheless, the Bank of Korea(BOK) diagnosed a significant level of uncertainty regarding the future direction of prices.

Fourth, Export-oriented economy: The monthly trade balance has been in deficit for 15 consecutive months from March last year to May thisyear, but it returned to surplus from June. Monthly exports have decreased year-on-year for 12 consecutive months since October last year.
This is the longest export decline since December 2018 to January 2020 (14 months). The trade balance in September is also analyzed as adownturn surplus due to a greater decrease in imports than exports.

6ECONOMIC GROWTH PERFORMANCE

7GDP GROWTH (ANNUAL %) - CHINA, JAPAN, KOREA

8GDP PER CAPITA GROWTH (ANNUAL %) - CHINA, JAPAN, KOREA

9IMF, EGO

3. ECONOMIC ADJUSTMENT AND
POLICY DIRECTION
It is a free trade agreement between
ASEAN and +5 countries.

11FRAGMENTATION OR INTEGRATION

12SET TO STRENGTHEN ASIAN SUPPLY CHAINS ?

13INTEGRATION• It involves 15 countries – 10 from Asean and 5 countries
who are Asean’s Free Trade Area (FTA) partners: Australia,China, Japan, Korea, New Zealand• The 15 countries make up 29.7% of the global population, or
2.2 billion people, and have a combined Gross Domestic
Product (GDP) of US$24.8 trillion (RM101 trillion).

4. ECONOMICPROSPECTS

RCEP: Asia-Pacificcountries form
world's largest
trading bloc

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The Peterson Institute for International Economics estimates thedeal could increase global national income by $186bn annually by2030 and add 0.2% to the economy of its member states. Someanalysts think the deal is likely to benefit China, Japan and South
Korea more than other member states.
The existing FTAs can be very complicated to use compared toRCEP. Under RCEP, parts from any member nation would betreated equally, which might give companies in RCEP countries anincentive to look within the trade region for suppliers.

The new free trade bloc will be bigger than both the US-MexicoCanada Agreement and the European Union.

15TRADE AGREEMENTS BETWEEN RCEP MEMBERS

16WTO
The World Trade Organization (WTO) is
not functioning effectively.

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ASIA, THE WORLD'S
FACTORY, AND THE
RECONSTRUCTION
OF ECONOMIC
MODELS

18

AVERAGE EFFECTIVELY APPLIED TARIFFS ON INTRA-RCEP TRADE

19

AVERAGE TARIFFS ON INTRA-RCEP TRADE DURING 20YEAR
IMPLEMENTATION

Source: Author's calculation based on the Annex I "Schedules of Tariff Commitments" of the RCEP agreement.
Note: tariffs are trade weighed

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ECONOMIC AND TRADE-RELATED CHARACTERISTICS OF
RCEP PARTIES AS OF 2021

Source: Policy Department for External Relations Directorate General for External Policies of the Union

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REVISITING DAVID RICARDOTHE TARIFF REDUCTIONS BETWEEN CHINA, JAPANAND SOUTH KOREA ARE MORE SIGNIFICANT,ALTHOUGH THESE SCHEDULES WILL BEINTRODUCED GRADUALLY AND WILLEXTEND INTO THE LATE 2020S

Presentation title

22REFER TO THE DEVELOPMENT OF THE EU

The political and economic
integration organization of 27
European countries iscollectively referred to as the'European Union (EU)’.

It originated from theEuropean EconomicCommunity (EEC)
established by the signing of
the Treaty of Rome in March1957.

In 1965, the European
Economic Community
merged with the European
Coal and Steel Community
and the European Atomic
Energy Community, forming
the 'European Communities(EC)' which encompassed thethree communities.

Then, in accordance with theMaastricht Treaty, whichcame into effect in November
1993, it was renamed theEuropean Union (EU).

Since then, additional member
countries have joined, andseveral treaty revisions havetaken place. With theimplementation of Brexit, thedeclaration of the United
Kingdom's withdrawal fromthe European Union inJanuary 2021, it consists of 27
member countries.

Presentation title

VISION 2050

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• Before and After: Scale, Scope & Density• Back to the Future, Asian versus Caucasian race
• Promote the Homogeneity as well as theHeterogeneity in terms of overall size, level ofdevelopment, economic structures, andresources• Comprehensive as well as Specific roles of theHigh, the middle and the low income• E-Commerce & I 4.0• Regional Key Currency issues, CBDC, ACB, etc• Philosophy, Education, Migration andAssimilation

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5. POLICY RECOMMENDATION FOR REGIONAL ECONOMICINTEGRATIONFirstly, the development of philosophy and ideology must establish the logic of history, economic growth and distributive justice.

Secondly, there should be empathy and consensus formation regarding production, mobility, and assimilation.

Thirdly, stability, efficiency, and reliability in the supply chain and demand market, which are sufficient conditions for industrial development
and economic growth, should be established.

Fourthly, the establishment of the institute of mutual respect and cooperative mechanisms for economic policies and systems is necessary.

THANK YOU
Soojong Kwak​
Lien Economic Research Institute