[EDITORIAL] Help Trade Partners UnderstandFour United States Senators, led by Larry Craig (Republican, Idaho), have filed a resolution of objection in Congress, asserting that the Korea Development Bank's refinancing of Hyundai Electronics corporate bonds is "unlawful" and "contravenes commitments made to . . . the World Trade Organization. . . ." U.S. Trade Representative Robert Zoellick called this a serious problem, confirming worries in Korea about mounting American trade pressures. In view of the economic slowdown in the United States and the Bush administration's conservative stance on trade issues, this problem could grow worse, harming our exports, if we do not deal with it now. This calls for immediate joint action on the part of the government and industry.
The most urgent order of business is to convince the American government that the KDB refinanced the bonds as part of our overall restructuring effort, not just to save Hyundai Electronics. The American Congress and administration must be made to realize that in terms of the interest involved, the deal does not exceed the limits set in Korea's agreement with the WTO. To do this, a team of experts in government, business, and legal matters should be formed to work out an appropriate response. And to prepare for mounting trade pressures, the government should make the most of the opportunity offered by the upcoming Washington summit and strengthen its efforts to broaden the U.S. authorities' understanding of our situation by establishing permanent channels for dialogue. We also need to work out a way to make the best use of those who have wide personal contacts with the U.S. administration and Congress.
In carrying out its economic policies, our government needs to exercise greater care in the future to ensure that such misunderstandings to not happen. The claims by the United States are excessive, but we cannot deny that our own government has handled the Hyundai Electronics case ineptly. As we saw in the court ruling on the deferment of the redemption of Daewoo Group beneficiary certificates, actions the government regards as necessary have led to criticism for abuse of authority and to friction with trade partners. The government needs to stick more closely to principles and the law in its restructuring measures, taking care not to overstep the bounds in providing assistance or implementing policy. Only then will our restructuring efforts gain international credibility and bring about the desired results.