Comparing Governments’ Policies in Promoting the Economic Growth (II): Free Trade Policy

Abstract

Taiwan and South Korean governments have tried to further economic liberalization through both bilateral and multilateral FTAs. Due to the political pressure from China, the development of Taiwan’s FTA network is progressing slowly. In comparison, South Korea has successfully extended its FTA links with various important economies in the world. Although South Korea’s trade surplus in goods has been gradually developed, its service trade deficit has enlarged. This indicates that South Korea’s greater involvement in the global economy through FTAs has strengthened its comparative advantage in manufacturing production while the services sector did not benefit from the greater economic opening up. Unlike South Korea, Taiwan’s overall trade in goods and services has been relatively unchanged in the last two decades.