3Corea Mex CooperacionTI

Towards Global Production Network of ICT Industry: 

Towards Global Production Network of ICT Industry Chong Sup Kim Seoul National University

What are the Macroeconomic effects?: 

What are the Macroeconomic effects?

Macroeconomic effects of an FTA between Korea and Mexico: 

Macroeconomic effects of an FTA between Korea and Mexico Simulations using CGE Model

Are there any additional effects?What was the experience with the others??: 

Are there any additional effects? What was the experience with the others??

Trade between Korea and Chile after FTA: 

Trade between Korea and Chile after FTA 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 1991 1993 1995 1997 1999 2001 2003 2005 Chile → Korea Korea → Chile $million

Case1: Elimination of low tariffs: 

Case1: Elimination of low tariffs 0 50,000 100,000 150,000 200,000 250,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $1000 Methanol Ingot (tariff: 2% → 0%) (tariff: 5% → 0%)

Case2: Large tariff reduction: 

Case2: Large tariff reduction 0 10,000 20,000 30,000 40,000 50,000 60,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $1000 streaky pork Red wine Kiwifruit (tariff: 25% → 16.7%) (tariff: 30% → 5%) (tariff: 45% → 29%)

Case3: Small tariff reduction: 

Case3: Small tariff reduction 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $1000 Flours, meals and pellets of fisch (tariff: 5% → 3.2%) Atrantic salmon (tariff: 10% → 3.3%)

Case4: Awareness effect: 

Case4: Awareness effect 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $1000 Roasted bleached (tariff: 0% → 0%) (tariff: 0% → 0%)

Mexico’s major imports from Korea: 

Mexico’s major imports from Korea

Korea’s Major Imports from Mexico: 

Korea’s Major Imports from Mexico (units: $1,000 and percentage)

Possible damages to the industrial sectors?: 

Possible damages to the industrial sectors?

Export Similarity Index in Mexico: 

Export Similarity Index in Mexico 0 10 20 30 40 50 60 1995 2000 2005 2006 Korea-Japan Korea-USA Korea-China

Top 10 export products to Mexico: 

Top 10 export products to Mexico

Effects on High-Tech Industry??: 

Effects on High-Tech Industry??

Export and Comparative advantage of Mexico’s telecommunication and computer industry in US market.: 

Export and Comparative advantage of Mexico’s telecommunication and computer industry in US market. Patent numbers, Computers & Communications 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Communications Computer hardware and software Computer peripherals Information storage

RCA and RTA of Mexico’s Telecommunication and Computer Industry: 

RCA and RTA of Mexico’s Telecommunication and Computer Industry Telecommunication & Computer in USA 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 RCA RTA

Slide18: 

Korea China Japan Hong Kong Thailand Indonesia Malaysia Singapore Philippines Flow of ICT parts and components: 1992 More than 1.0% of world exports 0.1~1.0% of world exports Less than 0.1% of world exports

Slide19: 

More than 1.0% of world exports 0.1~1.0% of world exports Less than 0.1% of world exports Korea China Japan Hong Kong Thailand Indonesia Malaysia Singapore Philippines Flow of ICT parts and components: 2005

Slide20: 

USA Canada Mexico 1992 2005 0.02 1.50 2.50 Note: the numbers represent the share in world exports (%) 3.26 1.26 0.01 USA Canada Mexico 0.01 1.80 0.78 1.19 1.03 0.05 Flow of ICT parts and components

Slide21: 

N. Europe U.K. BeNeLux France Germany Iberia Others Italy E. Europe Flow of ICT parts and components: 1992 More than 1.0% of world exports 0.1~1.0% of world exports Less than 0.1% of world exports

Slide22: 

Flow of ICT parts and components: 2005 N. Europe U.K. BeNeLux France Germany Iberia Others Italy E. Europe More than 1.0% of world exports 0.1~1.0% of world exports Less than 0.1% of world exports

Slide23: 

Exports of ICT Sector NAFTA RS 22.9 IR 35.6 EU RS 32.0 IR 68.2 ASIA RS 42.7 IR 33.2 14.9 9.1 5.4 5.9 2.0 2.8 1992 NAFTA RS 14.1 IR 44.6 EU RS 28.7 IR 64.2 ASIA RS 55.2 IR 54.6 10.5 9.3 3.7 2.1 2.5 1.8 2005 Note: RS represents regional share in world exports (%) IR represents share intraregional trade (%)

Korea’s FDI in Mexico: 

Korea’s FDI in Mexico 0 10 20 30 40 50 60 70 80 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $ million

Sectoral Distribution of Korea’s FDI: 

Sectoral Distribution of Korea’s FDI Manufacture 60% Construction 6% Wholesale 24% Telecomm 10%

International Division of Labor: 

International Division of Labor Korean ICT Exports to Mexico: finished vs. intermediate products

Slide27: 

Korea China Japan Hong Kong Thailand Indonesia Malaysia Singapore Philippines Flow of Auto parts and components: 1992 More than 0.5% of world exports 0.1~0.5% of world exports Less than 0.1% of world exports

Slide28: 

Korea China Japan Hong Kong Thailand Indonesia Malaysia Singapore Philippines Flow of Auto parts and components: 2005 More than 0.5% of world exports 0.1~0.5% of world exports Less than 0.1% of world exports

Slide29: 

USA Canada Mexico 1992 2005 0.13 4.28 6.23 10.10 1.52 0.11 USA Canada Mexico 0.13 2.73 5.50 7.95 3.98 0.06 Flow of Auto parts and components Note: the numbers represent the share in world exports (%)

Slide30: 

N. Europe U.K. BeNeLux France Germany Iberia Others Italy E. Europe Flow of Auto parts and components: 1992 More than 1.0% of world exports 0.1~1.0% of world exports Less than 0.1% of world exports

Slide31: 

N. Europe U.K. BeNeLux France Germany Iberia Others Italy E. Europe Flow of Auto parts and components: 2005 More than 0.5% of world exports 0.1~0.5% of world exports Less than 0.1% of world exports

Slide32: 

Exports of Automobile Sector NAFTA RS 21.7 IR 78.0 EU RS 52.5 IR 77.1 ASIA RS 23.7 IR 11.4 10.2 5.0 0.8 1.4 2.2 3.1 1992 NAFTA RS 20.5 IR 82.7 EU RS 53.5 IR 72.9 ASIA RS 21.0 IR 15.0 8.1 3.7 0.5 1.4 1.8 5.7 2005 Note: RS represents regional share in world exports (%) IR represents share intraregional trade (%)

Towards Global Production Network of ICT Industry Thank You: 

Towards Global Production Network of ICT Industry Thank You