[Column] Checking U.S. protectionism

Ahn Ho-young

The author, a former Korean ambassador to the U.S., is chair professor of Kyungnam University and a member of the diplomacy and security division of the JoongAng Ilbo Reset Korea campaign.

American political scientist Edward Luttwak published an essay entitled “From Geopolitics to Geo-economics: Logic of Conflict, Grammar of Commerce,” which drew attention to neo-mercantilism around the end of the Cold War. A New York Times column by Nobel Prize-winning economist Paul Krugman reminded me of what Luttwak argued three decades ago. In December, Krugman wrote a piece defending the Joe Biden administration turning its nose at the World Trade Organization (WTO) for its finding that protectionist tariffs levied under the last Trump administration against Chinese imports for national security were illegitimate. Trump abused the 1948 General Agreement on Tariffs and Trade (GATT) Article 21, which enables a nation to take protectionist actions for “essential security interests.” The U.S. bending the rules to pursue its goals could raise the risk of protectionism expanding worldwide, Krugman said, but nonetheless added, “I think the Biden administration is doing the right thing. The GATT is important, but not more important than protecting democracy and saving the planet.”

Krugman is among many American opinion leaders who support the black-and-white approach even when the U.S. can uphold international rules and democracy at the same time. These changes in American thought raise concerns for three reasons.

First of all, it can have an adverse impact on the international economy. The U.S. led the Bretton Woods system after World War II to ensure free trade because trade protectionism after World War I had deepened a postwar global depression. Going against the model it designed could bring about grave consequences to the global economy.

Second, there are the ramifications of the U.S.-China economic disengagement. Many thought that U.S. economic containment could have less impact on China due to the intricate connections between the two largest economies since the Cold War. But Krugman’s argument suggests that decoupling between the two economies could be deeper than expected.

Lastly, the impact on the Korean economy cannot be minor. South Korea is an open economy. If geopolitics guide U.S. external economic policy, the Korean economy would be hit hard. So what can Korea do?

It must first enhance dialogue with policymakers in the U.S. administration and Congress as well as opinion leaders like research institutes and media organizations. Dialogue would be more effective if it admits geopolitical as well as economic repercussions. American scholars on U.S.-China relations say that the biggest strength of America against China is its respect for international order based on rules and liberalism and alliance with mutual values.

In other words, the rule of the law is the core value of the international order. Most U.S. scholars won’t be able to retort the argument that America can sustain its supremacy when it stays by the rules.

Second, it is important to build consensus among nations with similar views. Many countries that worry about trade protectionism by the U.S. are the countries who strive to defend the rules-based international order, particularly after Russia’s invasion of Ukraine. They are European Union member countries and Canada, Japan and Australia. They have invited South Korea to the Group of Seven and NATO summits. Senior officials from these countries have been visiting Korea. Seoul must work harder with these nations to sustain WTO authority and promote agendas focused on preventing a return to trade protectionism.

Third, Korea must strive to keep up its technological edge. That is crucial not just for the economy, but for geopolitical reasons. In its Workers’ Party convention last January, North Korea declared it would develop tactical nuclear weapons, not just strategic ones. The country changed its nuclear doctrine last September, shifting the role of its nuclear weapons to “offensive” from “defensive.” Since then, doubts about the U.S nuclear umbrella have deepened in South Korea. The U.S. nuclear umbrella must be reliable. To help ensure a nuclear deterrence, Korea must strengthen the values in the alliance through unrivalled competitiveness in high tech areas like semiconductors and batteries.

In a national science and technology meeting last October, President Yoon Suk Yeol vowed to promote 12 strategic technologies, including quantum computing, next-generation nuclear reactors, bioengineering, artificial intelligence, robotics, aerospace and hydrogen. He took the right direction.

Translation by the Korea JoongAng Daily staff.