Gov`t, industry discuss Korea-China garlic dispute

A trade conflict between Korea and China has erupted again over the import of garlic; however, the government has yet to figure out a clear solution.

The government and industry held a joint meeting Friday and discussed measures to cope with China`s demand that Korea imports its garlic, but they failed to produce a clear solution. The ``garlic`` dispute occurred after China threatened that it would suspend imports of Korean polyethylene and mobile handsets unless Korea made good on its promise to purchase garlic. Hosted by the Ministry of Commerce, Industry and Energy, the meeting was attended by 14 industry representatives including those from the Korea Petrochemical Ind. Association, the Korea International Trade Association, Samsung Electronics, Maxon Telecom and Hanwha Chemical.

At the meeting, the ministry asked companies exporting polyethylene and mobile handsets to China to share the financial burden of some 10 billion won that is required to import an additional 10,000 tons of garlic from China. But the companies rejected the offer citing financial difficulties. In addition to the financial problems, the Korea Petrochemical Ind. Association said that it does not make sense for exporters of polyethylene and cellular phones to buy garlic in connection with a trade dispute. The government should resolve the issue, it argued. Particularly, industry representatives pointed out that Korea`s import burden increased sharply because the government failed to arrange a safety device for the import price at negotiations last year, and they called for fundamental measures at a governmental level.

The Agriculture and Fishery Ministry bought 12,000 tons of garlic last year to meet the minimum market access (MMA) volume using farm product price stabilization funds, and it cannot afford more purchases. So, the government plans to hold a meeting of the ministers of foreign affairs and trade, agriculture and forestry, and commerce, industry and energy on Saturday morning and discuss measures to solve the matter.

Meanwhile, the Korea-China Private Economic Council held its sixth meeting with about 120 industrialists and government officials from both countries in attendance at Namdaemun, central Seoul, Friday and agreed to resort to non-lawsuit methods such as arbitration to settle the dispute.

Lee Byong-Ki eye@donga.com