abstract

South Korea’s mercantilist trade policy traces back to its developmental period that started in the early 1960s and led to the successful story of export-oriented industrialization, often dubbed the “miracle on the Han River” in the 1970s. This study argues that it was a good example of developmental mercantilism. However, the political economic conditions, both external and internal, that underpinned South Korea’s traditional trade policy paradigm came under heavy pressure at the end of the 1990s. Among other things, the outbreak of the Asian financial crisis of 1997-98 shattered the illusion of South Korea’s unstoppable economic growth. South Korea's departure from its traditional, top-down trade policy centered on export promotion and import protection can be best illustrated by its active pursuit of FTAs.