Korea and China reach garlic agreement

After 40 days of grueling discussions, the garlic negotiations between Korea and Chain have finally come to an amicable conclusion. The Ministry of Foreign Affairs and Trade announced on the 15th that the two delegations, which started negotiations on the garlic trade issue on the 29th of last month, have finally seen the signing of an agreement. The agreement is to be formally consummated this coming weekend after confirmation from the higher levels of the Chinese government.

On the other hand, the Ministry of Agriculture revealed around 150 billion won will be provided to minimize the damage to farmers from the consummation of the agreement. The Ministry of Agriculture remarked, "50 billion won of the budget will be used to purchase desired sale volume of the farming community at a government guaranteed price while the remaining 100 billion won will be used to set up a garlic distribution center, improve garlic seeds, and establish a stable garlic production base by mechanizing farming."

-Details of Agreement: Korea has approved an import quota of 20,000 tons of low-tariff(30%) frozen Chinese garlic. From this China will have secured a low-tariff garlic export of 32,000 tons when including the minimum market approach (MMA) volume of 11,895 tons already secured. This volume is around 5,000 tons less than the total volume imported last year at 37,000 tons.

However, Korea has agreed to increase the quota of low-tariff garlic imports incrementally at the level of the MMA volume increased every year. In lieu of this, China will remove the export restriction of polyethylene and portable phones made on June 7th.

-Pros and Cons: When looking at the results of the negotiation, there is no way to avoid the fact Korea has lost more than it has gained. In relation to volume, Korea has been able to curb the import of Chinese garlic, which has been surging each year. However, due to the import restrictions on polyethylene and portable phones a loss of US$ 14 million and US$ 1.5 million was incurred respectively by Korean companies. To add, when including damage incurred from the volume under hold and the volume delayed in production, the total damages are estimated to be considerably higher. Korea was unable to get any compensation for the damages incurred from China`s unilateral measures.

-Problems with trade policy: The uncooperative environment among ministries and the lack of strategy are apparent. From the start of the garlic discord to the consummation of an agreement, the last 40 days elucidated the disarray of the government`s trade policy.

As China retaliated with trade measures, a fierce debate was made among ministries on the feasibility of implementing an emergency garlic import restriction. Facing the fight with the enemy, all the Korean government could do was to fight among themselves, and this clearly broke the line of battle even before meeting the enemy. This led the Korean side to being dragged along by China, even though the Chinese side lacked a just cause.

There was also a lack of communication between the trade negotiation arm, the Ministry of Foreign Affairs and Trade, MOCIE and the Ministry of Agriculture.