Since the conclusion of the Uruguay Round (UR) negotiations, Korea has taken steps to reduce, if not remove, tariff and non-tariff barriers (NTBs) to trade as well as to encourage inward foreign direct investment, notwithstanding the Asian financial crisis that erupted in 1997. In the wake of the crisis, Korea has continued to pursue major reforms. Nonetheless, the customs tariff is the principal instrument of Korea's trade policy. It accords substantial and highly varied levels of protection at the border to domestic industry and is therefore a potentially important obstacle to the efficient allocation of resources and therefore sustained growth. The average applied most-favoured-nation (MFN) tariff is higher than in most other industrialised countries. Moreover, tariff "spikes" are pervasive, particularly as far as agricultural products are concerned; this is partly due to the "tariffication" of agricultural NTBs in accordance with the UR. Korea also uses several types of NTBs. Estimates of some relatively simple summary and complementary indicators for tariffs are reported in this paper; they are designed to reflect the level and structure of tariffs. In addition, some non-tariff barriers to trade are discussed briefly.
