[Viewpoint] Free trade on equal footingStarting today, the Korea-U.S. free trade agreement is officially in effect. Korea now becomes a county with free trade deals with 45 countries around the world. The achievement comes eight years after the country’s first FTA with Chile took effect in April 2004. Including 10 Asean member countries, Korea has signed FTAs with the 27-member European Union as well as Switzerland, Norway, India, Peru and many more.
We are also negotiating more FTAs with 12 countries, including Canada, Mexico, Australia and Turkey, and preparations are also underway to begin negotiations with China, Japan and Israel.
Free trade has become an undeniable trend. Over the past eight years, Korea has pushed the FTA network forward tirelessly, regardless of changing administrations. It is a great achievement that about 35 percent of our total trade volume comes from FTA partners. This is where Korea stands after the Roh Moo-hyun administration adopted the strategy of forming multiple FTAs simultaneously in order to stay within the global trade order.
Korea’s 45 FTA partners mostly have adopted similar strategies. That is the current fashion of the global trade order. Because agreements are difficult to reach when many countries gather together to negotiate, they chose to have bilateral talks, one after another.
And yet, the ongoing controversy over the Korea-U.S. FTA stems from two perennial issues: whether we should really open up or not and whether we should follow anti-American sentiment or not.
Regarding the first question, we have already paid expensive costs - and learned important lessons. The opening up of the rice market, perhaps one of the most sensitive situations, is a good example.
During the 1992 presidential election, then candidate Kim Young-sam pledged that he would stop the rice market opening up at all costs. The promise, however, was aimed at earning more votes, and he had no vision for the future of the country’s agricultural industry. And in November 1993, Kim gave a keynote speech at the Asia-Pacific Economic Cooperation summit as the president of Korea. There, he had no choice but to accept the market opening with no exception, including the rice market.
In return for Kim’s pledge, a farm and fishing subsidy was adopted starting in July 1994. It was intended to raise 15 trillion won ($13.3 billion) for 10 years until June 2004 to strengthen the competitiveness of Korea’s agricultural and fishing industries. Our taxpayers eventually had to pay for Kim’s pledge, but Korea’s agriculture and fisheries industries saw no noticeable improvement. The subsidy was extended by another 10 years until 2014. This is an expensive lesson on how we must prepare for an unavoidable market opening.
Anti-American sentiment exploded in Korea after the 1980 Gwangju Democratization Movement. Activists were enraged that the United States, which had the operational command control over the Korean military, did not stop Korean troops from suppressing their resistance. Since then, anti-U.S. sentiment has deepened as the United States pressured Korea to open its market.
In 1987, Washington pressured Korea to import American cigarettes. The reason was simple. At the time, Korea registered a whopping $10 billion surplus annually in its trade with the U.S., but it didn’t open the cigarette market, in particular.
When trade grows, the pressure on market opening naturally grows.
Lets take a look at the garlic dispute with China in 2002. After Korea restricted imports of Chinese garlic, China retaliated with restrictions on Korea’s mobile phone exports. Whether it’s American cigarettes or Chinese garlic, the principle of quid pro quo applies.
And yet, some Koreans still harbor anti-American sentiment over the Korea-U.S. FTA. If it originates from their sense of betrayal toward the U.S. during the Gwangju massacre, how should we feel toward China, who intervened in the Korean War to support North Korea?
Let’s leave aside the anti-U.S. sentiment and look at the movie screen quota system. After a negotiation with the United States, the number of days that Korean cinemas were required to show Korean movies was largely reduced starting in July 2006. The move was fiercely protested. But today, Korea is one of the few countries where domestically produced movies are on more than 50 percent of the screens. Recently, 20th Century Fox said it wanted to make an aggressive investment in the Korean film industry.
We must greet the beginning of the Korea-U.S. FTA with an understanding that all trade has a partner, and there should be no anti-American, anti-Chinese or anti-Japanese sentiments. And it is up to us to decide how to react to the market opening. That’s the national vision that began in the Roh administration and has been consistently pushed forward throughout the Lee Myung-bak administration.
* The author is the editor in chief of the JoongAng Ilbo.
by Kim Su-gil