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Economic Report

Economic reports, briefs issued by Samsung Economic Research Institute

Reorganization of World Trade Order on the Table

Reorganization of World Trade Order on the Table

KWON Hyuk-Jae, KIM Deuk-Kab, KOO Bon-Kwan, PARK Hyun-Soo

May 20, 2013

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The US, EU and Asia are competitively promoting free trade agreements (FTAs) that will reshape global economy if they are concluded. The US is pursuing a Trans-Pacific Economic Partnership (TPP) with 12 Asia-Pacific countries, including Japan, and is about to embark on negotiations with the EU for an FTA called the Trans-Atlantic Trade and Investment Partnership (TTIP). At the same time, 16 Asia-Pacific countries, including all of the region's major economic powers, will negotiate the "Regional Comprehensive Economic Partnership (RCEP)."

The countries involved account for 80% of the global economy. Thus, if the three mega deals are reached, world trade would rapidly reconfigure around the three economic blocs, eroding the influence of the World Trade Organization (WTO).

For Korea, the impact could be profound since the nation's exports to these three potential economic blocs already account for 73% of its exports.

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