Feeling the squeezeThe United States and China are increasingly putting economic pressure on Korea. In a report on the Donald Trump administration’s trade policy submitted to Congress, the U.S. Trade Representative evaluated the Korea-U.S. Free Trade Agreement in a negative perspective.
The office pointed out that America’s exports to Korea decreased by $1.2 billion between 2011 and 2016 while Korea’s export to the U.S. increased by $13 billion over the same period. The office said that the U.S. trade deficit’s growth during the period was not what Americans wanted from the free trade deal.
The U.S. Trade Representative could ask for a renegotiation of the trade pact, which Donald Trump pilloried during his campaign. The U.S. Commerce Department decided to levy an 8.43 percent antidumping tariff on a Korean steel product — more than double its preliminary tariff. The Trump administration will increasingly separate the military alliance from trade issues down the road.
In the meantime, China is ratcheting up its unofficial retaliation against Korea for its decision to deploy the Terminal High Altitude Area Defense (Thaad) antimissile defense system, as seen in major Chinese online shopping malls deciding to shut down links to Lotte Group, which is exchanging a golf course for a military-owned plot of land. The Thaad battery will be located on the former golf course.
That’s not all. Following Tuesday’s hacking of Lotte China’s homepage, Lotte Duty-free Shop’s homepage was shut down for three hours after a series of denial-of-service attacks presumably from China. In addition, Beijing is banning Korean celebrities from performing on stage and in cyberspace, not to mention disallowing broadcasts of popular Korean dramas in China.
China accounts for 23 percent of Korea’s trade and the U.S. 12 percent. Our trade surplus mostly come from these two countries. The deterioration of relations between Seoul and Beijing will surely affect our economy. Our government should ease the conflict through dialogue.
Above all, the government must prevent the current situation from getting worse. The first step is refraining from unnecessarily annoying Beijing and Washington with overly sensitive reactions. Our ministries involved in trade and security must cooperate to develop a logic for dissuading China and America from taking extreme measures.
Presidential hopefuls must also prepare strategies after taking into account our ties with the U.S., China and the rest of the world.
JoongAng Ilbo, March 3, Page 34