상세정보

Preferential tariff policy and rules of origin are important topics for countries when negotiating on FTAs. The tariff liberalization leads to an increase in trade among member countries and a decrease in trade between member and non-member countries, while rules of origin inhibit the impact of preferential tariffs on trade. Several empirical studies verified that preferential tariff policy leads to trade creation, but some studies proved that preferential tariff policy diverts trade from non-members to members. Therefore, this thesis attempts to explore whether the preferential tariff policy of the China-South Korea FTA caused trade diversion based on the model firstly proposed by Romalis (2007). After finding the trade diversion caused by tariff reduction, the paper calculates the amount of trade diversion caused by the preferential tariff for each year, according to the method by Russ and Swenson (2019). In addition, this paper will also consider the effect of rules of origin on trade diversion by quantifying product-specific rules of origin. This paper will use import data and tariff data at a product-country-year level and the gravity model proposed by Romalis to investigate the relationship between the changes in China's imports from the 17 countries in the sample and the preferential tariffs of the China-South Korea FTA during the 2013-2019, as well as the relationship between rules of origin and the change in the imports. The empirical results show that each 1% reduction in the China-South Korea tariffs is associated with a 0.055% decrease in China's imports from other countries relative to Japan's imports from other countries. Moreover, the import diversion caused by the preferential tariffs decreases by 0.049% for each 1-unit increase in the RoO restrictiveness index.

I.	Introduction	1
1.1	Research Background and Significance	1
1.2	Research Questions	3
1.3	Structure of the paper	5
II.	Literature Reviews	7
2.1	Trade Creation and Trade Diversion	7
2.2	Rules of Origin (RoO)	10
III.	Overview of China-South Korea Trade	14
3.1	Statistical Observation	14
3.2	the China-South Korea FTA 23	
IV.	Rules of Origin Provision in the China-South Korea FTA	26
4.1	Status of the RoO	26
4.2	Features of the RoO 29	
4.3	Restrictiveness of the RoO	 34
V.	Quantitative Analysis of the Trade Diversion Effect of Tariff Liberalization and RoO in the China-South Korea FTA	38
5.1	Empirical Model	38
5.2	Data	41
5.2.1	Reference country	41
5.2.2	Variables	42
5.3	Empirical Analysis	43
5.4	Robust Test and Result	 47
5.4.1	Remove the year 2017 from the empirical model	47
5.4.2	Remove Australia from the empirical model	 48
5.4.3	Remove the products which apply ‘wholly obtained’ product-specific rules of origin	48
5.5	Trade Diversion Estimates	49
VI.	Conclusion and Implication	52