On Free Trade

Not Title But Its Content Matters

Chaos theory has it that the flutter of a butterfly's wings in, say, America could create a tornado in Korea. If so, what effect will the remarks of a U.S. presidential hopeful have on policymakers in Seoul? Sen. Barack Obama's repeated criticisms of the Korea-U.S. free trade agreement (FTA) are drawing keen attention, and raising more than a few eyebrows here. Unfortunately, however, rival politicians seem to interpret the Democrat presidential nominee's comments to their own liking without getting to the point.

Sen. Obama's description of the Korea-U.S., or KORUS, FTA as ``badly flawed'' or ``not a smart'' deal, could be what President Bush cast aside as ``throwaway political lines'' aimed at voters, or they reflect the Democrats' time-old protectionist tradition. Either way, these words appear not entirely correct, based on insufficient or misguided information, as some U.S. media pointed out.

The Democrat presidential nominee said, ``You can't get beef into Japan and Korea, even though we have the highest safety standards of anybody.'' ``If South Korea is selling hundreds of thousands of cars to the United States and we can only sell less than 5,000 in South Korea, something is wrong,'' he added.

Some of Sen. Obama's aides should have told him that Australian and European beef products are being sold here with no problem, as they meet quarantine standards required by Seoul. Also, while made-in-U.S. vehicles are struggling here, some Japanese and European models are rapidly expanding their market shares by satisfying Korean motorists' tastes far better, not because there is any discriminations among imported cars. In short, Washington pried open the Korean market, but U.S. firms have failed to meet local consumers' demands, watching their foreign rivals reap the benefits of economic liberalization here.

Some government economists have expressed concerns about Obama, if elected, turning protectionist to nullify the KORUS FTA. As Michael Ha of The Korea Times reported Thursday, however, it would be correct to think the potential U.S. leader is a free trader, but a very picky one. If he could reopen NAFTA, there is no reason he will not call for renegotiating the KORUS FTA.

So what government officials should do is not quarrel over whether to redo the deal or even what they should call it ― renegotiation or additional negotiation ― but instead prepare for various scenarios that might happen on the other side of the Pacific.

Come to think of it, bureaucrats, politicians and even economists here have fought over just whether they should push ahead with the bilateral FTA with or without corresponding action in Washington, but have failed to explain why ― exactly for what reasons they should pass it or veto it.

In other words, most Koreans still do now know whether the bilateral FTA will be beneficial for them, and if so, why? Free trade is not necessarily a win-win situation. Sure, the U.S. market is far larger than here, and Korea's dependency on exports for economic growth is one of the highest in the world. On the other hand, however, Korea will have to shoulder additional burdens in 55 sectors, against seven for America, while changing 24 laws to the U.S.'s six.

Seoul only has Sen. Obama to thank for giving it some time to reread the fine print of the accord, even pointing to which part.