Trade barriers have rapidly been lowered as a result of globalization of the world economy and proliferation of regional economic blocs. Economic competition has intensified among countries and among corporations as well with the economic borders easier to cross than ever before.
This study has made the countries to push forward the strategy of raising national competitiveness by setting up global economic hubs where multi-national corporations are integrated in certain domestic terrain.
In other words, they put in great efforts of preparing for the laws and regulations and the administrative support tailor-made for their specific economic situation in order to attract more foreign investment such as multi-national corporations.
In Korea, Special Economic Zones are in place to attract foreign investment, which are Free Trade Zone, Free Economic Zone and Foreign Investment Zone. As of April 2015, 13 Free Trade Zones, eight Free Economic Zones and 86 Foreign Investment Zones are in operation.
More than 10 years have passed since the system of the Free Trade Zone was introduced and operated in full scale and Korean government has exerted significant effort to promote the system. However, many critics pointed out that the system has not borne much fruit in promoting foreign trade and job creation and that more effort is needed.
Accordingly, this study tries to find the flaws of the system and propose a improvement plan by way of carrying out analysis of the Free Trade Zone system and its comparison to other similar systems in Korea such as Free Economic Zone, Foreign Investment Zone and Total Bonded Area and to the Free Trade Zone system in other countries such as China, Taiwan and Singapore.
Key Words : Free Trade Zone, Free Economic Zone, Foreign Direct Investment