This study is to analyse service industry in Korea, China and Japan(KCJ) and some tasks for free trade agreement among the three countries. Services have long operated in politically sensitive economic sectors and as such have been heavily regulated. ...
This study is to analyse service industry in Korea, China and Japan(KCJ) and some tasks for free trade agreement among the three countries. Services have long operated in politically sensitive economic sectors and as such have been heavily regulated. In most countries of the world, for example, governments own and directly or indirectly control the communications infrastructure and services. Other services industries such as banking and insurance are either government owned or highly regulated in most countries. KCJ must be in a situation to strengthen their services industry. And the only viable strategy for the sustainable development of KCJ might be the opening to the world. The stronger competition associated with regional services trade, with similar cultural background, can reduce costs and prices, increase efficiency and innovation, and broaden the range of services being offered. It can also reduce the fragmentation of services markets. More productive services sector can also be the foundation for the better performance of other sectors, notably the manufacturing sector, as this increasingly relies on support and inputs from efficient and cost-effective producer services. FTA on services among KCJ might help them in strengthening their respective comparative advantage in services.
Services are widely differing economic product activities distinct from manufacturing, mining and agriculture. The term encompasses a broad range of industries that provide basic economic infrastructure (communications, transport, distribution, energy-related services, construction, water supply, sanitation and sewerage services, waste collection and disposal), financial infrastructure (banking, insurance, financial markets), business support (advertising, marketing, computer services, professional services), or needed social infrastructure (education, health and social services).
Services have long operated in politically sensitive economic sectors and as such have been heavily regulated. In most countries of the world, for example, governments own and directly or indirectly control the communications infrastructure and services. Other services industries such as banking and insurance are either government owned or highly regulated in most countries.
Of late, attention has shifted to the most dynamic segment of the service sector, producer services. Producer services, banking; finance; insurance; business services such as various professional services, research, advertising, marketing, consulting or data processing; transportation; storage; and communication services are used in the intermediate production of manufactured goods and other services. Demand for these activities results largely from the economic transactions of other industries. Producer services are thus facilitators of other businesses, both international and domestic, and thus are important for KCJ which have comparative advantages in goods trade over the rest of the world. For the past ten years, KCJ have experienced consecutive trade surplus in goods trade, while maintaining wide trade deficit in services trade. And not only the trends of KCJ towards service economies but also the comparison of comparative advantages of services sectors with advanced countries confirm that there are considerable gaps in the level of services sectors. KCJ must be in a situation to strengthen their services industry. And the only viable strategy for the sustainable development of KCJ might be the opening to the world. The stronger competition associated with regional services trade, with similar cultural background, can reduce costs and prices, increase efficiency and innovation, and broaden the range of services being offered. It can also reduce the fragmentation of services markets. More productive services sector can also be the foundation for the better performance of other sectors, notably the manufacturing sector, as this increasingly relies on support and inputs from efficient and cost-effective producer services. FTA on services among KCJ might help them in strengthening their respective comparative advantage in services.