BUSINESS

Free trade system being challenged like never before: experts

By Julie Kim Jackson
  • Published : Nov 6, 2017 - 16:46
  • Updated : Nov 6, 2017 - 16:46
One day ahead of US President Donald Trump’s visit to Korea, the Ministry of Trade, Industry and Energy and Korea International Trade Association on Monday held an annual trade conference, discussing ways to combat trade protectionism.

The fourth 2017 International Conference of Trade and Industry at Coex in Seoul opened under the theme of “A new cooperation paradigm for realizing free and inclusive trade,” with both local and international trade experts tackling growing concerns over increasing uncertainty in trade politics with regards to the Trump administration’s crusade to renegotiate trade agreements deemed unfair to US workers.

“This theme is meant to explore a new paradigm for the international community to overcome the resurgence of protectionism and to expedite free trade in the era of the ‘fourth industrial revolution’ with a more equal distribution of the fruits of economic growth,” said Kang Sung-cheon, deputy minister for trade at the Ministry of Trade, Industry and Energy. 

(From left) Peter Petri, professor at Brandeis University; Robert Koopman, chief economist at the World Trade Organization; James Bacchus, professor at the University of Central Florida; and Jeffrey Schott, senior fellow at the Peterson Institute for International Economics, attend a panel session on inclusive trade policy at this year’s fourth annual International Conference of Trade and Industry at Coex Grand Ballroom in Seoul on Monday. (Yonhap)

“The free trade system has brought tremendous growth to the world, free trade has significantly contributed to economic growth, job creation and poverty reduction all over the globe,” said Kang. “However, amid economic slowdown and delayed restructuring of industries that followed the 2008 financial crisis, the free trade system is now being challenged like never before.”

Washington and Seoul have already commenced amendment discussions on their free trade agreement, following Seoul’s top trade negotiator Kim Hyun-chong meeting with US Trade Representative Robert Lighthizer on Oct. 4 for the second session of the Korea-US agreement joint committee in Washington, where the two sides announced they had agreed to begin the process of amending sections of the deal.

“The US President Donald Trump is going to be in town tomorrow, and looking back one year ago, the world was getting an alarming signal,” said Choi Byung-il, a trade professor at Ewha Womans University.

“We hadn’t seen any US politics where trade had become such a divided issue, (there were) presidential elections and on top of that, (we hadn’t seen) any Republican president not talking about free trade, but protectionist trade,” Choi said, adding that as opposed to increasing protectionism, global trade needs to reallocate resources through open trade to combat issues arises from anti-globalization sentiments, which argue the benefits of trade liberalization have failed to reach all workers adequately.

During his visit to Japan on Monday, President Trump also went on to criticize the US’ trade deal with Japan.

“We want fair and open trade, but right now our trade with Japan is not fair and it’s not open,” Trump was reported as saying at the US embassy in Japan. “Right now our trade with Japan is not free and it’s not reciprocal.”

“It is in some ways a pessimistic time,” said Peter Petri, professor of international finance at Brandeis University. “For the first time in 70 years, remarkably, the United States is challenging some of the accomplishments which the world has laid in place in its trade architecture.”

“But I think there are also reasons to be hopeful ... first of all, it’s not yet clear how far, or how deep, the US challenge to the trading system will go,” Petri continued. “There is, of course, a lot of conversation about that in the United States, but there is also very strong support from the business community and increasingly from the political community to making sure that the basic structure of that trading system remains in place.”

“No country in the world, has come close to Korea’s record in its successful use of the opportunities created by trade to improve its economy and its society,” he added.

Despite continued ambiguity regards the future of the bilateral trade deal between Seoul and Washington, the Korean government as well as a number of US Congress members have publicly stated they are strong supporters of the Korea-US FTA and have urged Trump to avoid any drastic amendments that would jeopardize bilateral relations.

However, not all members of the business community share the deal’s “win-win” sentiments. The Citizens Trade Campaign on Monday released a statement calling for the repeal of the agreement, arguing its “corporate-centered terms” cause harm to both Korean and American workers.

Citizens Trade Campaign is a US-based coalition of labor, environmental, family farm, consumer and faith organizations representing more than 12 million Americans and 33 different Korean organizations.

“US and Korean civil society groups vigorously opposed KORUS when it was first proposed because we knew that a deal negotiated behind closed doors with hundreds of corporate advisors would be disastrous for working people, family farmers, public health and the environment in both countries,” the statement said

“We continue to oppose KORUS’s corporate-centered terms, including investor-state dispute settlement that empowers multinational corporations to challenge our laws before panels of three private lawyers, intellectual property rules that drive up the cost of medicines and undermine human rights, rules that push a radical deregulation agenda, and more.” 

By Julie Jackson (juliejackson@heraldcorp.com)