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Open Access Publications from the University of California

The Renewed Neomercantilism and the Persistent Legacy of the Developmental State in Korea : Free Trade Agreements with Chile and with the United States

  • Author(s): Lim, Taekyoon
  • Advisor(s): Ayala, César J.
  • et al.

Based on a modified perspective of statist domestic institutionalism, which focuses on dynamic and intertwined interstate and intrastate power struggles, I address a theoretical issue of whether globalization signifies the decline of nation-states or whether globalization advances via the agency of nation-states in this dissertation. Empirically, I examine bilateral free trade agreements (FTAs), one of the so-called latest "neoliberal" globalization phenomena. In particular, I investigate two FTAs that Korea has recently concluded, one with Chile in 2003 and the other with the United States in 2007, by focusing on Korea in a comparative perspective vis-à-vis Chile and the United States. I analyze how the processes leading up to the conclusion and implementation of the FTAs materialized in relation to the internal and external forces of the nation-states in question.

As for economic regime, I argue that the Korean state, which broke with the developmental state model at a formal institutional level in the mid-1990s, still holds on to the legacy of the developmental state, especially renewed neomercantilism in the case of FTAs. By adopting a new trade policy of FTAs, the Korean state appeared to shift from protectionism to liberalization, as expected by international society in the post-1997 crisis period. However, the adoption of the FTA policy did not signify a genuine neoliberal transformation but the introduction of a new mechanism to continue the practices of the old developmental state, or strategic intervention of the state in the economy, if not as absolutely as in the past.

In a larger aspect of economic globalization, I argue that current FTAs signify a resurgence of neomercantilism, not truly complying with the alleged essence of "neoliberalism." Unlike the doctrine of neoliberalism, or the deepening of liberalization and deregulation, states intervene in trade policy in a more proactive and legitimized manner through FTAs. Through political processes of power struggles with their domestic forces as well as with their partner states, states involve in a sector-by-sector decision-making process in actual negotiations and implementation of FTAs, and strongly and intentionally promote exports in particular sectors while tacitly, if not readily, giving up other sectors.

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