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Are cell phone exporters garlic sellers?

Posted April. 13, 2001 18:47,   


A trade dispute between Korea and China over garlic has erupted again. Amidst the whirlwind, the government has made the astounding request that exporters of cellular phones and polyethylene purchase garlic imported from China. In short, the government`s move is more than clumsy. The trade dispute with China over garlic imports was sparked by the government`s imposition of emergency tariffs of 315 percent on imported Chinese garlic in order to favor Korean garlic growers ahead of the general elections last year. In the face of strong protests from Beijing, the government restored the tariffs to the original level and promised to import 32,000 tons of garlic from China. But because China raised garlic prices to take advantage of the agreement with Korea, private importers failed to make good on the commitment, leading to the eruption of a new dispute.

In connection with the recent development, we cannot help but deplore the Chinese attitude. It is highly undesirable that China, which is seeking membership of the World Trade Organization (WTO), should frequently menace exporting nations with threats of import bans on some specific items. China`s preposterous increase of garlic export prices to exploit the bilateral agreement is open to harsh criticism. It was a great mistake as well as a diplomatic failure that the Korean government failed to attach a proviso on garlic import prices to the negotiated accord with the Chinese government last year. At that time, the Korean side should have reached a supplementary agreement that Korea reserved the right to suspend garlic imports if and when China introduced differential pricing between the domestic and export prices of the product. In this manner, a small initial error is likely to cause great losses to the nation in the long run. What is more, when private businesses have given up garlic imports on account of the price rise, the government has come out and demanded that exporters of cellular phones and polyethylene import the Chinese garlic. Why is it that electronics and chemical firms have to purchase a Chinese farm product? If the government made a such request on the grounds that these businesses gain profits from trade with China, it is feared that the government would go as far as to make it obligatory for electronics companies, which earn money from the export of their semiconductor products to the United States, to import U. S. cars.

From now on, the government should try to rectify its shortcomings regarding the Chinese garlic deal. It is necessary to renegotiate the issue with Beijing in a manner that places a regulatory device on the garlic price. In case garlic importers suffer losses from a rise in prices, the government should strive to seek a way to obtain compensation from the Chinese side for the potential losses, instead of trying to place the financial burden on the businessmen. Even though Korea registers a trade surplus with China, the nation has no need to comply with any unreasonable requests. Trade relations between the two countries will be normalized only when Korea maintains a strong posture, while consistently espousing international practice, even if the nation could face some short-run disadvantages.