[Letters] Free trade leads to greater prosperityWhat do Usain Bolt and a Samsung television have in common? Little at first glance. Yet both represent - in their respective fields - examples of globally successful exports. Both contributed to the success of the London Olympics: Usain Bolt as a triple gold medal winner and Samsung as one of the lead sponsors. Both have grown to become worldwide brands.
Their success is only possible thanks to the free movement of people, money and trade across the world. We often take this for granted now, but it wasn’t always this way .?.?.
When the U.K. last hosted the Olympics in 1948, London was still in the grip of war-time rationing. International trade was a 300th of what it is today. The absence of free trade aggravated post-war economic difficulties, meaning that building materials were precious commodities. Athletes were given a mirror, a water bottle and a half share in a locker and had to bring their own food rations. In the absence of international finance, that’s all the U.K. could afford.
So much since has changed for both our countries. Today the Republic of Korea and U.K. stand proudly as the world’s 12th and seventh largest economies. And much of this success is down to the surge in international trade and investment. They have provided the people around the world with greater choice of products at lower prices and higher living standards, and they have helped to take millions of our citizens out of poverty.
For all these reasons we need to resist a return to protectionism.
With world trade talks stalled, that means pushing ahead with ambitious free trade agreements with key partners. That is in part why the EU-Korea Free Trade Agreement - the world’s second largest - is so important. Despite the challenges our economies face, the agreement is already creating jobs in both of our countries.
According to U.K. Customs, Korean exports to the U.K. increased by 24 percent in the first year of the agreement; the U.K.’s non-oil exports to Korea were up 15 percent. So the agreement is protecting and creating jobs in both of our countries. And in the coming years, Korean think tanks expect the EU-Korea FTA to create over 250,000 new jobs here in Korea.
Resisting protectionism also means that the U.K. and Korea must lead by example. In both our markets, we need open global trade and investment. The British government knows that foreign investors always have options about where to invest. That is why it is constantly striving to improve the U.K.’s offer to investors, for example by making the U.K.’s corporate tax regime the most attractive among the G-7 economies, and why the U.K. is third only to the United States and China as the preferred destination for global foreign direct investment.
Korea too is competing with other Asian economies for foreign investment. According to the latest World Economic Forum survey, Korea ranks 19th in the Global Competitiveness Index, up from 24th last year a strong performance. The survey suggests that with a more consistent, transparent and objective regulatory environment, foreign businesses are more likely to keep existing investments here and to choose Korea, rather than China or Vietnam for example, as the destination for new investment, creating new jobs for Korean workers.
At a time when Koreans are debating the future of economic development, it is important they act in support of economic growth rather than taking short-term measures that risk undermining their prosperity. That is certainly what I want to see.
by Scott Wightman British ambassador to Korea