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A Study on Expected Impact of KOR-US Reciprocal Defense Procurement MOU

  • Journal of Asia-Pacific Studies
  • Abbr : JAPS
  • 2018, 25(4), pp.5-30
  • DOI : 10.18107/japs.2018.25.4.001
  • Publisher : Institute of Global Affairs
  • Research Area : Social Science > Social Science in general
  • Received : November 14, 2018
  • Accepted : December 13, 2018
  • Published : December 30, 2018

Hong, Young Sik 1 Man Ki, Kim 2 Young Hwan Sohn 3

1세종대학교 국정관리연구소
2KAIST
3세종대

Accredited

ABSTRACT

Entering an ‘RDP MOU’ with the U.S. would have a significant influence not only on the national defense strategy of Korea, but also on the defense industry at large. Despite this, however, research efforts into this MOU have been sluggish compared to its importance. From a macro perspective, this study carefully estimated the effect of signing a KOR-US RDP MOU through the lens of the Korea-U.S. FTA agreement and WTO Government Procurement Agreement. In terms of industries, the present research sought to estimate changes in competitiveness by comparing the size of the Defense Industries and Export Incentive Policy from 10 years ago, when a previous study was conducted on the same topic. Microscopically, the expected effects were identified through a survey of Korean defense companies. Furthermore, since the agreement is reciprocal, an interview with the U.S. defense contractor was conducted to indirectly examine the U.S. company's intentions. Research shows that if the RDP is similar to the Korea-U.S. FTA or WTO Government Procurement Agreement, it is likely to have a positive effect on exports and trade with almost no expected damage to the domestic market. Korean defense contractors identified significant growth in terms of export volume and participating businesses, and they have in fact expanded their export support system over the past 10 years. The survey results also confirmed that the Korean defense contractors were positive about the RDP, while the U.S. defense industry was very positive. As such, this study has proposed a full-scale investigation into the Korea-U.S. defense procurement agreement at the governmental level.

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