Garlic Dispute Creating a Big Stink

If you asked me to pinpoint the stance the government is taking on the trade war threatening to start between Korea and China, I would be very hard-pressed to give you a definitive answer.

What started, according to China, as unfair taxation by the South Korean government on cheaper Chinese garlic, has resulted in retaliatory restrictions on Korean products like mobile phones. With each agreeing that further ‘friction’ in trade must be avoided, the various ministries with interests in the dispute hold equally differing opinions. And, what is more important is the ramifications of any actions taken and future trade relations not only with China but with all Korean trade partners as well.

There is the popular opinion that we should simply lower tariffs on Chinese garlic, re-allowing the flow of Korean goods like cellular phones and polyethylene into China. But the problem is not that simply rectified.

An official with the Korea Trade Commission (KTC) commented that by altering the tariff rate previously set just because the other country calls it ‘unfair’ or reacts with trade restrictions, sets an awkward precedent; therefore any decision on this matter calls for discretion.

The regretful thing is that the government from the outset should have lodged formal complaints against China’s retaliatory measures with the World Trade Organization(WTO). According to WTO regulations, such retaliatory acts should be done in “equal measure,” and require prior consultation. China’s unilateral move without warning, however, flies in the face of such regulations.

With no objections formally made about Chinese disregard for WTO regulations, at a time when China’s admission into the organization is still pending, it will be hard to go against this precedent when Chinese-made bicycles and other products are dumped on Korean markets.”

The ‘garlic issue’ also gives us good reason to think about what happens when what looks like expedient trade negotiations go wrong the precedents that result.

When agricultural matters were brought up at this year’s Uruguay Round of the WTO, the Korean government allowed garlic to be allowed into the peninsula on the grounds that an exorbitant 376 percent tariff be set, while only a 30 percent tariff was placed on frozen garlic, thinking it unlikely to be imported. This, however, induced a tidal wave of frozen garlic to be imported.

Henceforth I expect that the government will consider national pride and just cause as well as economic benefits when approaching the negotiating table with China or any other nation.

by Hong Byung-ki