Embracing Free Trade Agreements, Korean Style: From Developmental Mercantilism to Developmental Liberalism

Abstract

This study analyzes how and to what extent South Korea has embedded developmental liberalism into its free trade agreement (FTA) initiative, departing from its traditional focus on developmental mercantilism. In the wake of the global economic crisis of 2008-09 and the subsequent expansion of government interventionism across the world, the developmental state model has attracted renewed scholarly attention. It offers a useful conceptual framework to examine how a particular set of arrangements between the competitive and uncompetitive sectors in South Korea has shifted from developmental mercantilism to developmental liberalism. South Koreas FTA initiative constitutes a notable policy shift to liberalism, departing from a mercantilist approach with a policy mix of import protection and export promotion. It has been shaped by a top-down political initiative rather than a bottom-up demand from business groups and the general public. Despite South Koreas liberal but state-centric nature, its FTAs are closely embedded in its social fabric.