[Opinion] Being Silly or Smart

What is the common denominator among an auger, poverty and love? It is that the more they reveal themselves the hard people try to hide them. An auger protrudes its sharp end in a pocket. Dirt on a poor man’s shirt looks increasingly evident as he ignores his poverty. Your face beams out when you fall in love. In a book titled `An ugly tree protects a mountain,` the author taking an example of coughing instead of an auger. Added to the list might be `an act of silliness.` When it acts silly, whether it is a country, a business or an individual, the silly thing often reveals itself no matter how hard it pretends to be opposite.

△ The Ministry of Finance and Economy has decided to classify `Dakota,` a leisure pickup imported from the U.S. that has room for five passengers, as a passenger vehicle not a truck – a move aimed at imposing special consumption tax set for 14% of the price of a passenger vehicle to the import car. The rub is that the Ministry of Construction and Transportation already classified the pickup as a truck under the vehicle management law. MOFE, however, is apparently taking a different stance. It argues that Dakota is a passenger vehicle according to the provision of `special consumption tax` that requires to `decide a type of a car depending on the purpose of its use.` This is why Ssanyong Motor’s Musso with five seats is treated as a passenger car. And not surprisingly, the U.S. began to file a complaint about the decision. A high-ranking official at the U.S. Embassy to Korea recently visited the Ministry of Foreign Affairs and Trade to extend the U.S. administration’s concern about the decision.

△ There is an unwritten rule in international trade observing that a country treats foreign goods with their equivalents in the home market once they enter the country. And taxes are a key in this rule. Then, `Dakota` should be subject to special consumption taxes in the market where Musso for five passengers is also imposed with the special tax. In this respect, MOFE’s decision seems to hold true. The vehicle law introduced by MOCT is aimed to effectively control vehicles and ensure safety for the public, not covering tax codes.

△ Yet, we cannot but feel uneasy about the news of the U.S. complaint. The government has often times conceded to the U.S. when it met with U.S. opposition. We have committed a folly repeatedly at negotiating table with U.S. on a number of trade issues. It is welcoming that MOFE is making a smart move this time. There are a number of government agencies besides MOFE, however. And the chances are that we might see one of those agencies commit a folly.

Kim Gi-hong, Guest Editorial Writer, Researcher at the Korea Institute for Industrial Economics & Trade, gkim@kiet.re.kr