It now feels like ages ago, but during the recent presidential election, there were stark differences in many of the two political camps' national policies. Interestingly, one area where the two showed little difference — in fact almost the same in substance — was trade policy. In other words, at a time when the country becomes deeply fractured along the political, regional and generational lines, it somehow managed to maintain one voice when it comes to trade. For trade, it’s a good sign. Trade in this country indeed defies political differences and social discord.

Through the early presidential election on June 3, President Lee Jae Myung began his term immediately. As we all know, many pressing issues are waiting for the new president and his administration. Among them is trade policy, as the country is undergoing an unprecedented and excruciating tariff turmoil since January. As with any other issue on the national agenda, the next five years will be an immensely critical moment for trade. Trade policy during this period, I believe, will probably seal the fate of the country for many decades to come.

So tough, but this is a good timing; as they say, new wine in new wineskins. There are a couple of things that we can consider on this occasion.

First and foremost, patience — we need to slow down to speed up. At this point, we need to take a long-term perspective. We ought to think about what happens after the current volatility in tariffs. For the past several months, the whole country has been consumed by the US tariff measures, for which you need an Excel sheet to follow as they change constantly. The on-again and off-again tariffs have whipsawed industries and businesses in Korea. The negotiation deadline is set (July 9), so naturally, the government should be desperate. And yet, hurrying will only complicate the situation. A deal made in haste would just sow the seeds of more disputes.

Come to think of it, despite all the confusion and consternation, under the circumstances, Seoul and Washington will find common ground either before or sometime after July 9. That, however, does not necessarily solve the root problem. It would be wrong to assume that the agreement in July will fix everything and we’ll finally have a stable trade environment. It is instead just the beginning of a long-standing dialogue, most likely throughout the tenure of the Trump administration. Most probably, Washington might want to continue to review and revisit the July agreement and aim to adjust it from time to time.

This type of open-ended deal with a continuing review mechanism would be a worst-case scenario. Post-tariffs and post-deal bilateral trade should be stipulated in explicit terms in a July instrument. As long as the promised terms are adhered to, reopening and revisiting the agreement because of the bilateral trade performance should not be permitted. A safeguard encapsulating the idea is a must. That job will be incredibly difficult to pull off, but it needs to be done. So, any deal in July needs examining from a long-term perspective. Again, there is no need to rush, but a need for patience.

Now, how can we do this? How do we ensure a long-term assessment in this nail-biting and pressure-filled bilateral dialogue? There are many things we can do, but in my view, the most pressing one is a "control tower." Trade issues are prone to turf battles among ministries and agencies since almost everything involves trade in one way or another. Korea is no stranger to this. Ministries tend to have a Pavlovian reaction to defend their turf with a siloed vision. In fact, sometimes they have to due to plausible domestic reasons. A perfect recipe to miss the wood for the trees.

The problem: The trade landscape has changed dramatically, such that it now demands an overall assessment of all assets one country possesses in a very short time frame. Which then means that there should be a person in charge of trade (both old and new trade matters combined). Economic security requires all things to be taken into account. Fragmented decision-making is a fatal drag in the current and upcoming trade landscape.

It is a welcome sign that the new administration purports to appoint an official in charge in that regard. The official at the helm may ensure intense internal debates among ministries, quick decision making when necessary, and one voice at the end of the day. Only through such a system will the nation be able to view a deal, any deal, in a long-term perspective and assess it from a strategic standpoint.

By all accounts, the next five years will be a critical moment for Korea in many ways. When it comes to trade, they will probably mark a watershed: protectionism exploding, rules being rewritten, digital economy taking center stage and US-China confrontation entering Season II. At every turn, Seoul will have to make smart but tough decisions. Has Korea peaked, or will it remain a robust trading nation? The next half a decade will tell.

It is indeed lucky that the nation has at least a strong consensus on the trade front at this crucial juncture. Hopefully, the new administration exhibits strong leadership in designing and implementing a trade policy so as to weather the unprecedented trade storm.

The current tariff headache will find its solution one way or another. The real question is what's next. Only with a clear and smart policy on trade can we be ready to face the next waves.

Lee Jae-min

Lee Jae-min is a professor of law at Seoul National University. The views expressed here are the writer’s own. — Ed.


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