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This policy analysis examines the key issues involved in the Korean Trade Adjustment Assistance (TAA) program. As an important trade policy platform, this research details how the TAA provision targets impacted businesses and employees and documents the program’s eligibility criteria and its evolution over time. The US TAA and EU EGAF programs are also reviewed by detailing their respective strengths and their differences from their Korean counterpart. Finally, we document a range of areas where the Korean TAA initiative needs to be improved in order to best assist the firms and employees that have been negatively impacted by trade liberalization policy.

The Korean government has begun to implement the TAA system since May 2007 in order to support small and medium firms whose sales, production and profits have decreased due to the intensified import competition. This paper analyzes the performance of the Korean TAA program based on the experience for the last five years and aims to suggest some relevant policy implications out of it. We find that the newly introduced Korean TAA system failed to accomplish the objectives of the program it had originally planned. It also failed to be an effective means for internal negotiations. All the efforts to retain marginal firms in comparative disadvantage turned out to be a big failure. This poor performance will threaten the system’s own existence in the near future. Even if the TAA system continues to exist, it will inevitably be converted into a worker-centered program instead of a firm-oriented industrial policy. Protecting people by protecting their jobs could be a strategy mistake. With the launch of new government of Korea in 2013, curtailing or abolishing the financial assistance program for marginal firms needs to be implemented immediately. Moreover, consulting services need to be more professional and customized.

This study analyzes the policy initiatives that have been adopted by the US government since the 1930s. We document the institutional bodies responsible for the implementation of trade policy, as well as the objectives and decision making practices that are associated with policy formation. We also examine the new institutional movement of the Trump Administration’s neo-protectionist “America First” trade policy and its potential impact on the Asian region. Finally, our study examines the recent renegotiation of Korea-US FTA from a perspective of each country’s internal decision making process and discusses a number of issues that have relevant applications for Korea. The results from our analysis show that U.S trade policy show that despite a long period of an open and liberalized trade policy focus, recent neo-protectionist measures by President Trump could lead to potential trade wars and a return to the beggar-thy-neighbor policies of the 1930s. Such an anti-globalization agenda could have dire consequences for export dependent countries in the Asian region.