The Korean government introduced the trade adjustment assistance (TAA) program to facilitate structural adjustment under the implementation of its free trade agreements (FTAs). One big problem with the TAA program is that its criterion for eligibility for TAA support requires a 25 percent decrease in sales volume, and this does not reflect firms' business realities. The TAA program should be reformed to reflect that the TAA is a quid pro quo for the implementation of FTAs with large economies such as the United States and the EU.

The views expressed in this paper are of the authors' alone, and do not necessarily represent those of their affiliated institutions. This work was supported by the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2010-327-B00340). We thank Professor Wing Thye Woo for his valuable comments. The usual disclaimer applies.

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© 2011 The Earth Institute at Columbia University and the Massachusetts Institute of Technology
2011