Trade experts warn that Korea needs to diversify partners

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Trade experts warn that Korea needs to diversify partners


From left, Lee Jae-min, a law professor at Seoul National University; Miaojie Yu, deputy dean of the National School of Development at Peking University; Daniel Ikenson, trade policy director at Cato Institute; Kim Young-ju, CEO of Korea International Trade Association (KITA); Lee Hye-min, visiting professor for the Graduate School of International Studies at Seoul National University; Zhigang Tao, HSBC professor in global economy and business strategy at the University of Hong Kong; and Andrew Polk, partner and co-founder of Trivium China pose for a photo during an international forum held by KITA at the InterContinental Seoul Coex in southern Seoul on Monday. [KOREA INTERNATIONAL TRADE ASSOCIATION]

Trade experts at a forum in Seoul cautioned that Korea needs to diversify its trade partners to ensure its survival as the U.S. midterm results are unlikely to bring a dramatic shift to the country’s protectionist trade policies.

Business lobbying group Korea International Trade Association held its “What Happens Next: U.S. trade policy and U.S.-China trade conflict after midterm elections” forum at the InterContinental Seoul Coex in southern Seoul with about 250 Korean and international participants from academia, the government and private sector.

“Regardless of the U.S. House of Representatives, or probably even regardless of the change of leadership two years from now, I don’t believe there will be significant change with respect to the U.S. trade policy, particularly with respect to China,” said Lee Jae-min, a professor at the School of Law at Seoul National University.

“This is not just Trump’s personal agenda or the Republican Party’s agenda,” Lee added, “Rather, I think this is the overall reaction of the United States toward global trade in general.”

Lee said he believes Trump’s trade policies could become more aggressive during the second half of his term to improve his chances of re-election.

Daniel Ikenson, trade policy director at U.S. liberal think tank Cato Institute, said that Trump’s tack toward China and other trade partners is actually “more in line with what Democrats have wanted over the years,” reaffirming that Democrats taking the House won’t mean a shift in protectionist trade policies or a trade war with China.

“There is a bipartisan recognition that China has not been playing by the rules,” Ikenson said, adding that there are differing views, however, on whether imposing tariffs is the best way to handle the problem.

Many Americans also feel the country has been too lenient on trade for the last several decades after it helped other trade partners, including Korea, build up industries after World War II, he said.

Expert projections leave uncertainty over the future of Korea’s global trade as the country is heavily dependent on exports and imports with both the United States and China.

“Only a handful of countries will be able to avoid direct and indirect ramifications of the U.S.-China trade dispute,” said KITA CEO Kim Young-ju. “Korea is likely to be among the most vulnerable, due to its proximity to both countries in terms of geography, economy and security.”

According to KITA, the two countries currently account for about a third of Korea’s total trade and 38 percent of corporate investments.

Ikenson advised Korea to diversify its trade markets and expand partnerships with emerging nations like India and Southeast Asian countries to survive through uncertainties caused by the U.S.-China conflict. The trade policy director also suggested Korea communicate a lot with the World Trade Organization and request the organization mediate its trade relationship with the United States.

As for relationships between the United States and China, Miaojie Yu, deputy dean at the National School of Development at China’s Peking University, said the two countries should try to solve the problem in talks rather than by waging trade wars.

Andrew Polk, partner and co-founder of the Beijing-based strategic advisory firm Trivium China, however, said it will be hard for the two countries to reach a sustainable agreement as they are essentially fighting for leadership in future technologies, not only in terms of trade.

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