The political economy of globalization and regionalism : an analysis of their impact upon the development of South Korean-European Union trade
Since the end of the 2nd World War, we have witnessed a tremendous amount of world trade expansion. This has been in part caused by the favourable international trading environment provided by the public good, the GATT, aided by the politico-economic hegemony of the United States of America. Korea took advantage of this favourable situation by pursuing an economic development strategy of export-led growth. As the US hegemony began to decline, the formation of a multipolar system based upon regional blocs, has given a new dimension to Korea's international trade. In EU-ROK economic relations, regionalism and globalization of world trade has brought Korea both challenges and opportunities. The case study of Korea's leading electronics firms clearly suggests the requirement for the maintenance of a physical presence through FDI to conduct business successfully in the European market. The new international, politico-economic order obliges firms outside a regional body to locate marketing, manufacturing or even product development within the territories of a regional economic group to avoid NTBS such as anti-dumping. Economic interaction between the European Union, a giant of regionalism with potential economic power and the Republic of Korea, a forerunner among newly industrialized nations, highly vulnerable to outer setting, seems to be regulated by rules and norms, like the pendulum moving between the two extremes of protectionism and a free, liberal trading environment. The study attempts to show that Korea's exports to the EU market will increase more and more as the pendulum moves toward the free trade logic based upon multilateralism. In order accurately to analyse the EU-Korean economic relationship, a better understanding of regionalism and globalization of World trade should be added to the existing literature on the international political economy (Realism, Liberalism, Marxism). The general assumption of the study is based upon economic liberalism which puts much focus on economic efficiency. As a model of deep economic integration, whether the European Union is strongly committed to multilateralism or resorts to protectionist trade regimes such as anti-dumping, quantitative restrictions, or local content rules, will be a major determinant of EU-Korea trade interaction in the future because Korea will continually pursue economic development with export-oriented characteristics. The maximization of EU-ROK economic exchanges will be achieved only when the world trading system is committed to multilateralism under the WTO in general, and the EU's pursuit of open regionalism to reduce NTBs against the ROK in particular. Of course, Korea should make reciprocal efforts further to liberalize and deregulate its trade regimes by opening more markets to foreign products. Korea's active pursuit of globalization and localization strategies to penetrate into the EU market is a prerequisite for a continuous rapid growth of the Korean economy.