[OUTLOOK]After food, open more sectors

A free trade agreement with Chile was ratified by the National Assembly recently after a tortuous process. It is not that I do not understand the difficulties that this free trade deal would pose for our farmers, but in the overall interest of our people, it is fortunate that the treaty was finally ratified. And there are more domestic sectors than just agriculture that lag in international competitiveness, and it is a pity that the agricultural sector, which has a particularly high percentage of low-income workers, was the first to be opened to the outside world.
There are several sectors in our society that urgently need reform ― even if it takes pressure from the outside to open the market. To list a few, there is education, legal services, medical care, the movie industry and general commerce. These sectors require even more reform than the agricultural industry.
Just last year, more than 20,000 middle and high school students left Korea to study abroad, either alone or with parents who were emigrating mainly for the education of their children. We have a deficit of over $1.8 billion in educational services alone. That is not a small number, even in comparison to the deficit of $6.6 billion in our trade in agriculture products. Unlike in the past, where the average Korean could not dream of sending a child abroad to study because of low income levels here, more and more parents who can afford to do so will educate their children abroad unless the quality of our education improves.
The deficit in the education sector is more than just a problem of foreign currency outflows. The social phenomenon of sending children abroad to study reinforces the transmission of wealth from generation to generation. The more affluent a household is, the earlier it will decide to send its children abroad when it becomes clear that it will be difficult for the child to enter a top-level university in Korea. The problem is that once these foreign-educated children return to Korea as young adults, they will have even better chances at life than those who remained behind to toil and make their way in Korean colleges. Because of the pathetic quality of domestic education, those who study abroad will at least have the advantage of speaking a foreign language; they will be better off than those who toiled here to get a mediocre education. That advantage, of course, translates into better job opportunities. Our standardized education system benefits only those who escape it.
With the situation in Korea thus, many have started to argue for foreign-operated schools to stimulate domestic educators and curb the outflow of foreign currency. Those who advocate foreign schools say that the argument for “education with a nationality” to block the opening of the education market is nothing but a selfish excuse. Even foreign-run schools would employ Korean nationals as teachers and teach the Korean language and history, these advocates say. Even if young children attended foreign schools, they would still remain under the supervision of their Korean parents and thus receive an “education with a nationality” more than if they studied abroad. Frustration about the future of our education has mounted to the point of talk about “shocking” the education system into reform by throwing open the doors.
The legal services market is no better. The demand for advice on foreign law grows as the globalization of economic activities accelerates. But because the law market is not open, domestic firms must go abroad to seek the services of foreign lawyers. Also, many domestic law firms hire foreign lawyers on commission. The costs of this “license selling” are ultimately paid by the domestic businesses that use the law firms. An offer to open Korea’s law market was included in Korea’s proposal in the Doha round of international trade talks that are now going on, but further progress has been blocked by fierce opposition from domestic law firms. The lawyers claimed that should foreign firms enter the domestic market, they would not uphold the true purpose of the law, upholding social justice, and that foreign firms would distort the legal services provided not only in international law affairs but in domestic law.
I would like to ask whether our legal system, which has been closed to the outside world so far, has always avoided commercialism and worked to uphold social justice. Granted, domestic firms would lose work concerning international law because of their comparative disadvantage in foreign languages and law codes, but why are they afraid that they could not compete with foreign firms in Korean law? Our lawyers, who have thwarted recent efforts to introduce a modern system of law schools, should realize that the fundamental problem lies within, and not outside.
It is not a blind faith in free trade that impels me to advocate the opening of more markets. The agricultural market was opened for the sake of the entire country, at the expense of low-income farmers. It seems morally wrong to protect the interests of groups who are much better off, but still stubbornly oppose reform.

* The writer is a professor of economics at Seoul National University. Translation by the JoongAng Daily staff.

by Rhee Chang-yong