Lee, Wang

Abstract
This paper explores the strategic implications of the KORUS FTA. Despite their strained relationship, the US chose Korea as its second FTA partner in East Asia. To understand the US’s motivation, the FTA should not be viewed as a mere bilateral trade agreement, but as a part of a multilateral network of trade agreements. Its geographical position between China and Japan increases the geo-economic importance of Korea. The US is sending a signal to China through the trade agreement that the US will not surrender its economic hegemony in the region. In this regard, the FTA has generated a series of countervailing proposals from China, Japan and the EU in response to the expected discrimination that their products will encounter in the US and Korean markets through substantial trade diversion and the possibility of diplomatic isolation that they, as the US’s other main trading partners, could experience.
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