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Uruguay Round: Economic Effects on World Trade Order and Korean Economy
Yong-Kyun Cho
Introduction
The Uruguay Round(UR), the world's largest trade pact, was concluded on December 15,
1993 after seven years of negotiations. It implies revolutionary changes in the world
trade order as the World Trade Organization(WTO) replaces the existing GATT.
The UR started as the eighth trade negotiation round of the GATT under adverse world
trade circumstances where protectionism and regionalism are rampant in the world
economy. The UR was aimed at the recovery of free trade and, for this purpose, claims
multilateralism and Most Favorable Nation(MFN) as its basic principles. The UR accords
are revolutionary not only because 117 states, including most major actors in world
trade have participated, but because the accords deal with problems related to trade in
a comprehensive manner. The UR accords would enhance access to foreign markets
through the elimination of tariffs and non-tariff barriers in the manufacturing industry,
the reduction of subsidies in agriculture, and the liberalization of textile trade. It
provides new rules on anti-dumping, safeguards and dispute settlement procedures as
well as providing rules in new areas, such as service trade and intellectual property
rights, to open and expand international trade for various service industries, such as
banking and telecommunication.
Due to such a comprehensive coverage in terms of the subjects dealt with as well as
the number of countries participating, the economic impact of the UR is expected to be
enormous and widespread. The UR is, in itself, regarded as a new world trade order in
the sense that it stipulates new rules for various trade activities in various industries
and is expected to become effective in 1995; however it will take at least 10 years for
the UR accords to be fully implemented. Thus, the UR will significantly affect the shape
of the world economic order for the next century.
The UR accords would affect Korean economy to a considerable extent since Korea has
pursued export-oriented, outward-looking economic growth for the past 30 years. Its
impact on the Korean economy is expected to be mixed depending on the types of
industries. The impact is so crucial to the sustained economic growth of Korea that it
has to review its current long-run economic policy to establish proper countermeasures
considering the new trade order comprehensively. This paper first attempts to analyze the effects of the conclusion of the UR negotiations
on the world economy as well as on the Korean economy. Then it will suggest policy
options which the Korean economy should consider to overcome the fierce competition
expected in the aftermath of the UR.
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