The opening of service industry requires domestic institutional changes. Even though the adoption of global standards by opening may strengthen domestic service industry, it has the risks of causing inefficiency and instability due to the conflicts am...
The opening of service industry requires domestic institutional changes. Even though the adoption of global standards by opening may strengthen domestic service industry, it has the risks of causing inefficiency and instability due to the conflicts among various institutions and the unsatisfactory enforcement mechanism. These kinds of internal risks in the Kor-US FTA negotiation must be equally taken into consideration as well as its direct shocks. The opening of financial service industry may be an outstanding example. Even though the opening of cross-border transactions and new financial products will take very gradual process through the positive list approach, it will have profound impacts on the domestic financial supervisory system, in particular accelerating its transformation into the negative supervisory system. Under the present condition of the Korean supervisory and judiciary system, however, the premature deregulation policy may cause another financial crisis. In order to control the risks of the Kor-US FTA, Korean government needs to enhance the strictness of enforcement mechanism and the breadth of social safety net.