Trade Effects Of The Eu-South Korea Free Trade Agreement In The Automotive Industry

The EU-South Korea free trade agreement (FTA) represents a case of comprehensive trade liberalization between two major economies with large automotive industries. This article examines and compares the total and automotive industry trade effects of the EU-South Korea FTA. The empirical gravity analysis shows asymmetric effects between the bilateral exports of EU and Korea. Trade-enhancing effects are found in both gross and value-added trade indicators of EU automotive exports, while no substantial effects are detected in Korean exports. The post-FTA trade dynamics suggest that the removal of industry-specific non-tariff barriers (NTBs) played an important role in facilitating EU automotive exports.