한ㆍ미 FTA의 파급효과

The Effect of Korea-US Free Trade Agreement on Korean Dairy Industry

This study analyzes the effect of Korea-U.S. Free Trade Agreement on Dairy industry. Dairy industry is adequately modeled to investigate the changes in revenue of the dairy producers based on the multimarket partial equilibrium framework. The structural model is composed of the demand and supply functions at each different levels of dairy industry. This paper finds that dairy industry will bear the reduction of revenue by 388.5~917.8 billion Won depending upon the tariff reduction rate, when the elasticity of substitution of cheese is assumed 0.75. However, these estimates are sensitive to the cross price elasticity between domestic and imported dairy products.