Little Garlic Too Little to Dispute

The Sino-ROK trade agreement which cuts tariffs on Chinese garlic imports into S. Korea went into effect August 2. According to the agreement, S. Korea began importing Chinese garlic under a less than 50% tariff. This year, 32,000 tons of Chinese garlic have been imported into S. Korea. China has resumed importing Korean mobile phones and polyethylene, ending the two month Sino-ROK trade dispute.

Some people in S. Korea have criticized this trade dispute, saying that they have thoroughly taken back the "huge losses stemming from little things."

In 1999, Sino-ROK bilateral trade rose to US$25 billion with China importing US$17.2 billion and exporting US$7.8 billion. China's market is very important to S. Korea. China has already become Korea's third largest trade partner and Sino-ROK trade accounted for half of S. Korea's trade surplus. Thus, when S. Korea raised the tariffs on Chinese garlic imports, China retaliated by temporarily stopping imports on Korean mobile phones and polyethylene. A spokesman from the Ministry of Foreign Affairs and Trade anxiously said, "What we worried about finally happened. We should reflect on the cost of underestimating China."

The public reaction in S. Korea was vehement. The government caused US$500 million in losses over a little garlic. According to S. Korea's statistics, last year, it imported 22,600 tons of garlic worth US$8.98 million. At the same time, S. Korea exported US$41.4 million in mobile phones and US$471 million in polyethylene. Exports of these two products totaled US$512 million.

After the trade dispute over garlic occurred, more than 200 farmers of S. Korea held a protest near the Chinese Embassy to S. Korea. But, they did not receive much public sympathy. On the contrary, public opinion criticized the government for enacting such rash measures against such an important trade partner. Fortunately, this trade dispute did not last long. If the dispute over garlic continued without resolution, both sides would have suffered losses, especially with S. Korea suffering the brunt of the economic losses. At the same time, Sino-ROK relations would have been negatively affected.

The S. Korea's media says the government should reflect on this trade dispute and look at the big picture. It isn't worth a trade dispute with a trade partner worth billions of US dollars over something as minor as garlic.

One resident of Seoul, surnamed Kim, told the People's Daily, international trade has always been about mutual benefits. Slapping a large tariff on Chinese garlic not only doesn't solve S. Korea's farmers' income problem, it led to temptations of small gains causing huge losses. The S. Korea government should learn from this trade dispute.

One S. Korean economist said, this dispute over garlic shows that the Ministry of Foreign Affairs and Trade is not mature and nearsighted. S. Korea's trade surplus with China has increased yearly and the potential of China's market is huge. Regardless, it shouldn't just see the trees and not see the forest.

(People’s Daily)



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