한ㆍ미 FTA가 쇠고기 산업에 미치는 영향

The Impacts of Korea-U.S. Free Trade Agreement on Beef Industry: An Approach of Consumption Substitution

The effects of Korea-U.S. free trade agreement on beef industry are examined under the assumption that both domestic and imported beefs are not exactly the same goods but substitutes each other in consumption. Theoretical framework to analyze the effects is first provided, and then empirical examination with four scenarios for the related elasticities follows. The results are compared with those of conventional partial equilibrium analysis where the imported and domestic beefs used to be treated as identical products in the model. The results show that the effects on domestic price, production, and producer welfare are generally much smaller than those with conventional approach. The results also show that the trade diversion effect between exporting countries is highly likely to occur as a result of Korea-U.S. FTA, leading to the reduction in imports of Australian beef.