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fully subscribe liberal economic ideology. As a country depends on 75% of its GDP on trade this
orientation is natural. The accession to WTO and the active participation of APEC which
endorse trade and investment liberalization also show the Korea’s commitment to free trade.
Nevertheless we still can not explain the existence of protectionist policies in Korea. Goldstein
herself and other institutionalists might argue that ideas and beliefs albeit old and extinct
maintain their influence on trade policy through institutionalization of ideas. Institutions
incorporated old ideas and beliefs strongly influence the content and direction of current trade
policies. Korean case, however, is still anomaly since the old institutions which have reflected
protectionist ideas dismantled as a result of strong bilateral pressure from the U.S and
multilateral pressure from the WTO. According to Business Korea, "by the summer of 1989, the
average tariff in Korea was among the lowest for the non-OECD countries enabling it to dodge
the new crowbar of Super 301"(June 1989). In 1992, the liberalization ratio for entire industries
reached 81.7% and 97.8 percent for the manufacturing sector(Ministry off Finance 1993).
Moreover, financial crisis and IMF bail out program further opened up Korean economy. It is
just to say that institutional inertia practically disappear as of 1998 when Korean executed
through neoliberal economic reform as a return for IMF loan. Goldstein is challenged again.
Goldstein's limitation is that she focuses only on trade related institutions. As scholars
who stress the role of political institutions suggest, political institutions such as electoral
institution affects the trade policy. In order to explain Korean puzzle, we need to look beyond
trade-related institutions and to figure out the role of political institutions which seemingly
unrelated to trade policy. This study analyzes the role of Korean electoral institution in trade
policy. More specifically, the institution of electoral district which creates overrepresentation of
agricultural sector(which naturally protectionist) in Korean interest politics will be analyzed.
1. The Korea-Chile FTA Agreement
On October 24, 2002 Korea has concluded FTA with Chile after almost 3 years’
negotiations. Korea-Chile FTA is Korea’s first FTA and believed to contribute to Korea’s pursuit
of FTAs with other trading partners including Japan, Singapore and United States. However the
experts evaluate the Korea-Chile FTA as “half-success’ because several commodities which
both countries are especially interested in were excluded from the tariff elimination list. For
example, apples and pears for Chile and freezer and washing machine for Korea are excluded
from tariff elimination. One Chilean diplomat pejoratively remarks “Korea-Chile FTA was 70%
political and only 30% commercial”, meaning the political rather than economic logic
dominated the negotiations. He goes on that “economically speaking, Korea did not have much
to gain from the FTA and Chile will not be affected either(economically).
How could we
explain this strange outcome of Korea-Chile FTA negotiations? Why have two parties settled for
Convention