What TPP really representsAs French philosopher Roland Barthes argued, there is no neutral writing. Words like stone, bear or apple all have special emotions when history builds up in them. That is why labeling can be so crucial.
The White House made a special request to the U.S. media last September. It asked journalists to use the label “Affordable Care Act” for the medical insurance legislation coming into effect. The media had usually referred to as “Obamacare” because it was Barack Obama’s signature piece of legislation.
The request was made because of the power that comes from labels. When it was referred to as Obamacare, the role of President Obama in passing the legislation crowded out in the public’s mind the law’s merits and demerits.
CNBC conducted a survey of 800 people and the results were illuminating. It asked half of the participants whether they supported the Affordable Care Act. Twenty-two percent supported it, while 37 percent did not. For the other half of the participants, CNBC asked whether they supported Obamacare. 29 percent said they supported it, while 46 percent said they did not. The public either liked the legislation more or disliked it more when the name Obama was attached.
A change in a name can refurbish an image. Last year, the National Assembly renamed the Korea Radioactive Waste Management Corporation in Korean by replacing the words “radioactive waste” with “atomic power environment.”
Of course, nothing changes in substance when you call someone a professional body cleaner instead of a bath scrubber or rename a credit delinquent a defaulter.
But the public can be charmed by a change of words. And the issue of Korea’s participation in the Trans-Pacific Strategic Economic Partnership is a classic example.
Although it is packaged under a grand title that includes the term “Trans-Pacific,” the key for us is free trade between Korea and Japan. Korea has already established or is discussing free trade agreements with 10 out of 12 TPP members. The remaining two are Japan and Mexico. The trade volume between Korea and Mexico is about 10 percent of that between Korea and Japan. Therefore, it is not an exaggeration to say that TPP translates into a Korea-Japan free trade pact.
Negotiations to strike a free trade deal with Japan took place in 2004. The public didn’t like the plan - perhaps because of a feeling of repulsion toward Japan. From the labor union of Hyundai Motor to the Federation of Korean Industries, the opposition was vehement. They all said the automotive and machinery industries will collapse and the trade deficit would be enormous.
A group of 90 protesters against the FTA even staged a demonstration in front of the Japanese Foreign Ministry in Tokyo. Because of public sentiment, the government had to drop the plan.
And yet, after a decade, the situation was completely reversed, possibly because the public was blinded by the fancy label of the Trans-Pacific Strategic Economic Partnership. Opposition parties, civic and labor groups are silent.
The dominant view is that Korea could suffer big time if a free trade pact is signed with Japan. The two countries’ industrial structures are too similar, and companies in the same fields will face unnecessarily fierce competition. That means that the conditions for a successful FTA - the complementarity of the two economies involved - is weak.
Look at the cutthroat competition between Samsung and Sony or Hyundai and Toyota in the United States and China. There is no need for a long explanation.
When tariffs are dropped by a big margin, it is also disadvantageous for Korea. As of 2011, Korea’s average tariff was 12.1 percent, but Japan’s was only 5.3 percent. When the two sides cut tariffs at the same rate, who will suffer more? Korea’s trade deficit toward Japan has worsened rapidly due to the weak yen since last year when Tokyo started promoting Abenomics. In this situation, Korea will suffer a fatal blow when the tariff barriers are removed.
An equally serious concern is accepting a framework created by a third party when we join the TPP belatedly. A bilateral free trade deal, such as the Korea-U.S. FTA, is like a custom-tailored suit. The two sides can negotiate and decide on the opening of their markets and tariff rates depending on their situations.
But a multilateral regime, such as the World Trade Organization and the Trans-Pacific Strategic Economic Partnership, are different. When you are not a founding member, you have to fit yourself into the existing framework.
Acting Deputy U.S. Trade Representative Wendy Cutler said last week that negotiations on the TPP are in their final stages, and Korea’s participation is a very difficult issue. It feels like trying to squeeze yourself into a ready-made suit that doesn’t really fit you.
So what should we do?
As we have decided to join the TPP, it will be better to find effective ways to reduce the expected damage from the multilateral trade deal rather than blindly approaching the issue out of pressure. The government yesterday began bilateral talks with each of the six countries, including America, Mexico and Chile, ahead of the multilateral trade deal. In the process, the government must figure out how to minimize unwanted damage Korea has to face after the deal is done. President Park Geun-hye said on Friday that she has high expectations for Korea to formally join the Trans-Pacific Strategic Economic Partnership.
Raising an issue for good reasons and having a healthy debate are the best ways to prevent any unfortunate aftermath. And that job is for the opposition parties and civic groups. What good will they get from spending energy criticizing a run-down Japanese politician’s ludicrous statement? That won’t make a change.
It is more productive for them to spend their energy wisely preparing for repercussions from the Korea-Japan FTA disguised under the name of the Trans-Pacific Strategic Economic Partnership.
*The author is a senior reporter of international news at the JoongAng Ilbo.
by Nam Jeong-ho