[LETTERS to the editor]To compete, Korea must sign FTA pactSeoul is currently engaged in future-determining negotiations with Washington to reach an agreement by the end of this year. For Korea, a free trade agreement can be a significant step for a prosperous future as its trade volume accounts for 75% of its gross domestic product. However, it will not be easy. As the opposition argues, even Japan, which opened its domestic market 100 years earlier than Korea and became the world’s second largest economic power, dropped the idea of negotiating an FTA with the U.S., fearing the prospect of unfavorable domestic market restructuring and public sentiment.
While I agree that pain and grief can be expected for domestic producers and the social effects of restructuring, I have to say there is nothing bad with an FTA; it’s all up to us.
I support the FTA because the counterpart is the United States. Korea needs the United States. An FTA with the United States is crucially important for Korea because it is an opportunity to reverse our trade deficit by gaining better access in the U.S. market, and also because it is an opportunity to reshape service industries like financial services and health care to become more competitive.
Korea seems to be doing well in the global market, but the secondary industry-oriented market structure and flood of low-priced products from China and India can undercut Korean industries, which are bound to close domestic factories and open up cheaper ones overseas, leading to a “doughnut,” or hollow, economy. I know Korea lags way behind in the profitability and sophistication of its service industries, but the more we delay our decision, the more painful the results. Korea must understand the saying “No pain, no gain.”
However, this is not to say Korea should not insist on protections. Korea should give a priority to securing transparency in the market. Many oppositionists argue that if Korea opens its market, another Lone Star situation will occur. But mergers and acquisitions and lobbying activities are beyond government’s simple controls. Because the local market is too small to grow many major companies, foreign investments are more vital to build up Korea’s economy than ever before. And lobbying in political and economic relations will always be around, whether we want it or not. Foreign investments should be made more transparent and accountable.
Last but not least, Korea desperately needs effective diplomats and experts in their respective fields to negotiate the FTA. Even though I have no doubt that our diplomats will do their best for our country, I am often disappointed by the lack of expertise in various sectors, the manner of debate and negotiations and particularly statesmen’s indifference to the FTA. Before asking the public to settle down, the government should settle down from election campaigns.
The roles of diplomats and statesmen are directly proportional to our national competitiveness. Not only for this event but also for the future, it is important for Korea to nurture and engage greater numbers of young diplomats and experts.
by Choi Woong