What is it about?
Ever wondered how international trade agreements affect wages? Our research examines this question in South Korea, a country with extensive trade networks. Modern trade deals involve much more than traditional tariffs - they include complex rules about food safety, technical standards, and public procurement. Using the World Bank's Deep Trade Agreements database, we analyzed how these detailed provisions affect wages across different job levels in Korea. Our findings reveal interesting patterns. Some provisions, like those promoting transparency and food safety standards, boost trade. Others, like technical barriers and public procurement rules, can restrict it. More importantly, these agreements affect wages differently across job categories. Director-level positions tend to benefit from increased exports but face wage pressures from imports. White-collar workers show opposite patterns - their wages decrease with exports but improve with imports. These findings matter because they show trade agreements don't just change what's available in stores – they can significantly impact people's paychecks, potentially contributing to wage inequality. Our research helps policymakers understand how to design trade agreements that balance economic growth with fair wages. As the first study using Korean data to examine this relationship, our findings offer valuable insights for understanding how modern trade agreements shape wage patterns in our interconnected economy.
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Why is it important?
Trade agreements shape how countries do business with each other—but their effects go beyond just what we import and export. They can directly influence how much people get paid. Our study shows that in South Korea, some workers benefit from these deals while others may lose out, depending on their job type and the specific rules in the agreement. Understanding these impacts is important for making fairer trade policies. If we know which parts of a trade agreement raise or lower wages, we can help governments design better deals—ones that promote growth while protecting workers. This matters not just for economists, but for anyone who cares about jobs, paychecks, and inequality.
Perspectives
As someone interested in the intersection between global trade and social equity, I’ve always been curious about how large-scale economic decisions affect everyday workers. During my work, I noticed that many discussions on trade policy focus on national growth, but not enough on wage disparities. This study was my way of exploring that missing piece—how detailed rules in trade agreements can shift the balance of who wins and who loses in the labor market. I was also motivated by how today’s trade agreements are becoming increasingly complex, covering areas far beyond tariffs—like food safety, transparency, and procurement. I wanted to understand how these modern provisions are shaping trade dynamics in Korea specifically. By examining these deeper rules, I hoped to offer a more realistic picture of what trade means for both economies and individuals.
Ideun Jeong
Read the Original
This page is a summary of: Distributional Effects of Deep Trade Agreements: Evidence from South Korea, Asian International Studies Review, May 2025, De Gruyter,
DOI: 10.1163/2667078x-bja10040.
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