Effects of KORUS FTA on Small and Medium Sized Enterprises - Analysis by Items and Further Action Plan
Authors:   Asia-Europe Perspective Association, Lee Joon-Ho , Choi Jeong-Il , Lee Ok-Dong 
Published: June 2018

This paper is about KORUS FTA’s impact on Korean goods by items based on research of ‘trade structure between Korea and The U.S.’ and ‘competitiveness of American goods in Korean market’. The future scale of small and medium sized enterprises’ exports and imports of Korea has been estimated, considering Korean small and medium sized enterprises’ participation on trade and impact on items.
The validity of this research has been reviewed in comparison with announcement regarding analysis of economic effects of KORUS FTA by 11 government departments and national research organizations. 1,305 items, adjusted from 4-stage of revision from 9,137 concessional items from KORUS FTA, were chosen to be analyzed.
It was expected that exports and imports will grow up to 920.4 billion won and 435,4 billion won each for domestic small and medium sized enterprises from estimated exports and imports growth and whole trade. The amount of increase from export seems to exceed the amount of increase from import and 495 billion won of net export equals to total output of 337 numbers of small and medium sized enterprises with 2,539 employees.
Thereafter, this paper also covers how KORUS FTA effects small and medium sized enterprises and presents strategies categorized as short-term and long-term.
In a short term period of time, Firstly, governmental support is necessary to expand export. Distribution of Information such as scale of import and domestic market of the U.S. would enhance competitiveness in exports of Korean enterprises.
Secondly, support for investment expansion and technical cooperation is needed. Check the companies that have experiences in foreign market and export-oriented, and set them as targets to expand investments in the U.S. In addition, investment or technical cooperation of American minor enterprises and Korean major enterprises would raise the efficiency.
Thirdly, helping vulnerable sector is needed. Sudden increase or changeover of imports may suffer the businesses therefore, security of employment of this sector should be protected and training for business diversion also should be provided.
Fourthly, Setting up the plan to enhance competitiveness of exports through to enhance competitiveness of imports is required. In case of tariff removal between Korea and the U.S., imports of some parts would increase, and it is asked to support their export price competitiveness to maintain their export level.
Fifthly, intensive promotion and support of innovative enterprises are in demand. To enhance local corporations’ competitiveness, it is effective to focus on growing volume of its population number.
In a long term, a mid-long term of extended plan should be devised to enhance minor enterprises’ global competitiveness. The three policies are: Firstly, push the industries forwards to advance. Secondly, boost up international competitiveness by small and medium sized firms’ internationalization. Thirdly, reinforce market economy to vitalize and entrepreneurial spirit.