Free trade will continue to ensure prosperity
The specter of trade protectionism is rearing its ugly head again.
Britain's recent vote to leave the European Union reflects such a global tide, and ominous dark clouds are forming in the run-up to the November presidential race in the United States.
The aftermath of Brexit in international trade appears enormous. As a member of the EU, Britain is currently enjoying free trade with 27 other EU countries without worrying about tariffs and other trade restrictions. With the United Kingdom's divorce from the bloc, however, the EU will become protective about British exports and vice versa. Such protectionist moves might spread rapidly across the world amid the prolonged global economic slump.
What seems more worrisome is the possibility of America shifting to protectionism following the November presidential election.
Donald Trump, the presumptive Republican presidential nominee, doesn't hesitate to deny the legitimacy of free trade. In a speech last week, he reaffirmed his protectionist stance by vowing to review all free trade deals the U.S. has with foreign countries and to pull out of the Trans-Pacific Partnership (TPP) signed by 12 Pacific Rim countries in February.
The real estate mogul censured the free trade pact between Seoul and Washington as a "job-killing deal," alleging that it doubled America's trade deficit with South Korea and destroyed nearly 100,000 jobs in the U.S.
Things won't get better even if Hillary Clinton, the likely Democratic presidential nominee, becomes America's first female head of state. In the first draft of its platform unveiled Friday, the Democratic Party called the TPP "controversial" and hinted at reviewing free trade agreements. Without doubt, the Korea-U.S. trade deal will be no exception.
The surge in trade protectionism reneges on the general belief that free trade will ensure the prosperity of mankind. Apart from the fact that David Ricardo's theory of comparative advantage in international trade is still tenable, history teaches us that the rage of trade protectionism only gave rise to the scourge of war and poverty and would be disastrous in the long run.
Given Korea's heavy reliance on trade for economic growth, no other country is more concerned about the global protectionist move than Korea. As things stand now, it's almost certain that the U.S. will retreat significantly from the Obama administration's free trade stance whoever becomes the U.S. president.
In the worst-case scenario, the Korea-U.S. free trade pact might face an overall reexamination and Seoul might be designated as a currency manipulator by Washington. This is why Korea must not be vaguely complacent about the rising trend of trade protectionism.
If the past is any guide, it's no exaggeration to say that the U.S. was two-faced. The world's largest economy often threatened trade retaliation while advocating free trade. Our policymakers need to face up to this reality and map out measures preemptively to counter the global protectionist trend.
Of course, there will be a limit to what Korea can do as a middle power. Even so, the country should do what it can to block the global retreat to trade protectionism.
The specter of trade protectionism is rearing its ugly head again.
Britain's recent vote to leave the European Union reflects such a global tide, and ominous dark clouds are forming in the run-up to the November presidential race in the United States.
The aftermath of Brexit in international trade appears enormous. As a member of the EU, Britain is currently enjoying free trade with 27 other EU countries without worrying about tariffs and other trade restrictions. With the United Kingdom's divorce from the bloc, however, the EU will become protective about British exports and vice versa. Such protectionist moves might spread rapidly across the world amid the prolonged global economic slump.
What seems more worrisome is the possibility of America shifting to protectionism following the November presidential election.
Donald Trump, the presumptive Republican presidential nominee, doesn't hesitate to deny the legitimacy of free trade. In a speech last week, he reaffirmed his protectionist stance by vowing to review all free trade deals the U.S. has with foreign countries and to pull out of the Trans-Pacific Partnership (TPP) signed by 12 Pacific Rim countries in February.
The real estate mogul censured the free trade pact between Seoul and Washington as a "job-killing deal," alleging that it doubled America's trade deficit with South Korea and destroyed nearly 100,000 jobs in the U.S.
Things won't get better even if Hillary Clinton, the likely Democratic presidential nominee, becomes America's first female head of state. In the first draft of its platform unveiled Friday, the Democratic Party called the TPP "controversial" and hinted at reviewing free trade agreements. Without doubt, the Korea-U.S. trade deal will be no exception.
The surge in trade protectionism reneges on the general belief that free trade will ensure the prosperity of mankind. Apart from the fact that David Ricardo's theory of comparative advantage in international trade is still tenable, history teaches us that the rage of trade protectionism only gave rise to the scourge of war and poverty and would be disastrous in the long run.
Given Korea's heavy reliance on trade for economic growth, no other country is more concerned about the global protectionist move than Korea. As things stand now, it's almost certain that the U.S. will retreat significantly from the Obama administration's free trade stance whoever becomes the U.S. president.
In the worst-case scenario, the Korea-U.S. free trade pact might face an overall reexamination and Seoul might be designated as a currency manipulator by Washington. This is why Korea must not be vaguely complacent about the rising trend of trade protectionism.
If the past is any guide, it's no exaggeration to say that the U.S. was two-faced. The world's largest economy often threatened trade retaliation while advocating free trade. Our policymakers need to face up to this reality and map out measures preemptively to counter the global protectionist trend.
Of course, there will be a limit to what Korea can do as a middle power. Even so, the country should do what it can to block the global retreat to trade protectionism.
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