China's Retaliatory Ban on Some Korean Goods

China has stopped imports of South Korean cellular phones and polyethylene as a counter move to South Korea's restriction on the import of Chinese garlic. This is the most serious interruption of trade since their treaty on trade in 1992.

The South Korean government expressed its regret about China's retaliatory measures saying that China's ban on Korean goods runs counter to the principals of the World Trade Organization (WTO) and that the move was not reasonable. South Korea has decided to attempt to ease tensions through dialog with China.

The Korean government held an emergency meeting in the morning of June 8. Lee Hun-jai, the Minister of Finance and Economy, hosted the emergency meeting with the Minister of Foreign Affairs and Trade, the Minister of Agriculture and Forestry, and the Minister of Commerce, Industry and Energy participating in the meeting where they revealed their position on the conflict.

The South Korean government emphasized that its previous move to increase the duty on Chinese garlic from 30 percent to 315 percent was done in accordance with WTO regulations and the government also notified the WTO about the move.

The South Korean government said China raised objections to this move, and so the Korean government twice discussed the issue with China following WTO regulations where they suggested proper compensatory measures to China, but China rejected these proposals. The Korean government added that it regrets that China's retaliatory measures go against WTO regulations and their move was not reasonable.

The South Korean government revealed that it would try to solve this problem through conversation with China considering the importance of the relationship with China for the economy and commerce.

Kim Jin-pyo, depute minister for tax and customs in the Ministry of Finance and Economy, said that the amount of Chinese garlic imported had increased more than 90 percent every year since 1996, and so the Ministry decided to implement safe guards to protect Korean farming families. He explained however that as Korea's trade surplus with China, including Hong Kong, has reached $1.3 million every year, the Korean government would take measures to balance the trade surplus in order to persuade China.

Chung Eui-yong, deputy minister for trade, said that China's measures seemed to be a result of China's accumulated discontent with trade with South Korea.

by Kim Kwang-ki