[VIEWPOINT] Broken trust is garlic's residue

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[VIEWPOINT] Broken trust is garlic's residue

The government did not inform the public properly of important facts about the results of negotiations.

The repercussions caused by the 2000 negotiations over the safeguard measures applied to Chinese garlic imports are growing bigger by the day. Criticism of the negotiations in the political arena boiled to the point that those in charge of the negotiations at the time are getting sacked and garlic farmers have risen in protest all over the country.

To prevent such incidents from repeating themselves, one needs to ask what was the cause of this stir. One also needs to understand how that cause can be avoided in the future. There is an important fact that most people have failed to notice about the safeguard action taken on the Chinese garlic imports. During the time of the negotiations in 2000, China was not a member of the World Trade Organization. Had China been a member, none of the hard-line retaliations of China or the "secret" agreement not to extend the safeguard measures beyond 2003 would have happened.

However, China, a nonmember at that time, took advantage of the fact that it was not obligated to abide by the WTO agreement and took retaliatory action on our most favorable exports. More-over, it managed to gain a promise that the safeguard measures ?a legitimate right of any WTO member ?would not be extended. As a result, we had to rely on diplomatic negotiations, in place of applying the WTO regulations, in our trade relations with China at the time. For reference, China joined the WTO at the end of 2001, and since then China-Korea trade has been conducted under the laws of the WTO.

The most regrettable thing about this garlic safeguard business is that our government lacked transparency in its conducting of foreign trade negotiations. During the garlic negotiations, China was experiencing approximately a $ 5 billion deficit in trade with Korea.

This meant that there were certain restrictions in our negotiations with China and that there was probably no way that an agreement would be reached in the garlic negotiations without our promise not to extend the safeguard measures. All this should have been notified to the garlic farmers at the time and their opinions on the subject should have been collected and taken into consideration. How else would the farmers know what to prepare for? This negligence is all the more shameful because it would have been all too obvious that farmers would have applied for an extension of the safeguard measures and further steps should have been taken in the negotiation process.

It is necessary to understand properly the nature of the safeguard mechanism provided in the WTO agreement. A safeguard action is a self-help mechanism to deal with harm done to a domestic industry but that is not applied for an unlimited time. Generally, safeguard measures last for four years and even in the case of an application for extension, measures do not outlast eight years. In other words, a safeguard action is taken to buy time to build competitiveness and restructure the domestic business, not as an eternal protective trade mechanism.

So, how are we going to solve this safeguard situation now? The first thing we could do is try for an extension. The agreement with China was a promise between governments. The documents have not yet been open to the public so there is no certainty, however, according to what is already known, it was not a political promise but a legal one. Therefore, we could take steps to extend the safeguard measures domestically but that would mean facing international responsibility. For the extension, negotiations with China are unavoidable and yet the prospect of China agreeing to such negotiations seems bleak.

Should the extension of the safeguard measures prove to be difficult in the end, we would need to concentrate on various measures to minimize the impact on garlic farms. As mentioned above, even if the safeguard mea-sures are extended, they would still be valid for only a limited time. Sooner or later, the garlic farms would have had to make themselves fit and trim for survival.

The root of all this garlic evil can be traced to the Uruguay Round agreement on agriculture when a concession of low tariff rates on frozen or pickled garlic was given in haste to conclude the agreement. With this in mind, it must be acknowledged that while the 2000 garlic negotiations might not have been the best choice for our national interest, it was an inevitable one.

The real stinky part of this garlic business was that the government did not inform the public properly of the important facts concerning its negotiation results. What should really be called to serious attention here more than the government's inability to conduct trade negotiations is its failure to instill trust in the people's minds.

The writer is a research fellow at the Korea Institute for Industrial Economics and Trade.


by Koh Joon-sung

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