[Outlook]Embracing free trade

Have you ever thought about whether your salary is directly or indirectly related to the country’s trade? You might well say your work has nothing to do with trade. But the answer depends on how much trade makes up of the total gross national product. In Korea’s case, it’s 75 percent. In the United States and Japan, trade takes up around 25 percent. China is rising as the world’s smokestack, supplying cheap products in large quantities to countries around the world, but its trade still accounts for 25 percent of its gross national product. This shows that the Korean government must take its trade policy three times more seriously than the other three countries.
Many policies that the Roh Moo-hyun administration carried out over the past five years are now on the verge of being abolished, but there is hardly any controversy over its trade policy. Government officials in the Ministry of Foreign Affairs and Trade must have thought about creating a separate ministry for trade negotiations, but the presidential transition commission is not interested in that. The Kim Dae-jung administration signed a single free trade agreement, the one with Chile. Compared with that, the Roh administration has made significant achievements. It signed one free trade agreement with the United States and another with Asean. The negotiations for a free trade accord with the European Union have been going well so far. Joint research for negotiations with China is in its last stage. As negotiations of all the members of the World Trade Organization are too large-scale to produce any outcome, free trade accords seem like the best possible option. There is no reason for the Lee Myung-bak administration, which will take office soon, to halt the negotiations that are now in process. Instead, the new administration must make free trade a core policy of the country.
Of Korea’s total trade, imports make up more than half of the volume. The percentage that imports alone take up in Korea’s economy is higher than the percentages of both imports and exports combined in the United States or Japan. The Lee Myung-bak administration must pay attention to this when forming its free trade policies. The Roh administration deserves credit for actively pushing for bilateral trade agreements, but such deals were used more for promotional purposes to explore the international market than to boost the nation’s competitiveness.
Those in the administration prioritized the fair distribution of wealth, but while shouting for the protection of the economically underprivileged, they neglected or delayed restructuring the agriculture industry and reforming regulations in the service industry. Civil officials didn’t do much more than make the compromises powerful politicians wanted.
Still, the perception that imports are good and exports are bad is widespread among bureaucrats. The goal of administrative agencies must be to provide the best quality services and goods to people, but it is hard to shake off the impression that these agencies care only about the providers of goods and services making a profit.
Lee was elected on people’s wishes for a revived economy. He pledged to realize 7 percent annual economic growth when our economic growth potential is around 4 percent. Unless Korea’s economy becomes drastically effective, his pledge will turn out to be wishful thinking. We can say that during the industrialization period, Korea achieved rapid growth because Koreans worked long and hard. In a knowledge-based society, Koreans are now required to work wisely and creatively. The idea of producing the best materials, the best quality products, the best qualified human resources and the best companies only within our territory belongs to a bygone era. We need to change our mindset and open our doors to the world so that the best possible resources flock to Korea.
When signing free trade agreements, opening our doors to the other country is as important as making our partner open its doors to us. When imports are treated as an important part of Korea’s economy, the door to increasing our economy’s effectiveness will open. This door has been shut for a long time, so a blueprint for reform that opens the entire economy and intensifies competition must be presented. The new administration must carry out reform policies as if its destiny depends on it.
Korea’s government offices have been captive to the idea that they must put producers’ interests first. Even so, they spoke with different voices. Their differences must be coordinated for the national interests.
We will pay attention to whether the presidential transition team’s restructuring of government offices meets this expectation. When negotiating and signing a free trade accord, we must stop caring only about our exports and think about increasing the efficiency of imports. Then free trade will take its place as a core government policy that advances our economy.

*The writer is the dean of the Ewha Womans University Graduate School of International Studies. Translation by the JoongAng Daily staff.

by Choi Byung-il