Trade theory suggests that the more efficient utilization of productive resources following trade liberalization will lead to a one time static increase in GDP. Depending on country size and the nature of competition, terms-of-trade effects and scale effects may magnify or even reverse the sign of these static efficiency gains. On top of the static impact, growth theory suggests the potential for a medium-run growth effect, accumulation effects, as static gains induce changes in savings and investment patterns. We will firstly apply this approach to the welfare effect of the EU enlargement.
This paper aims to estimate the impact of EU enlargement to Korean economy. We will focus our study to changes on Korean export industries in EU member countries. In particular, we will examine France and Hungary's market, because the market share of Korean export in their domestic markets is inferior to 1%. From the estimation of impact of EU enlargement on Korean industries, we will suggest some strategies to promote Korean exports in these markets.