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International -- Editorials
IT'S TIME TO GET TOUGH WITH SEOUL (int'l edition)
For years, the U.S. has subordinated its various trade gripes with South Korea to the overriding need to placate a key American security ally in Asia. Now, though, the Clinton Administration is signaling that the era of trade tolerance toward Seoul is coming to an end--and that is the right move.
The top issue: U.S. trade negotiators need to convince South Korea to open up its protected auto market, even if it means threatening aggressive trade sanctions. Korea's increasingly affluent populace is buying cars at a brisk pace, and yet imports accounted for a mere 0.3% of domestic car sales last year, thanks to a web of tariffs, taxes, and other barriers. Korea's sanctuary market has enabled its auto companies to pile up profits at home to fund a massive increase in production. The danger for U.S. and European carmakers: a wave of low-priced Korean cars swamping emerging markets from Latin America to Asia.
Other trade concerns, such as Korea's efforts to shut U.S. oranges and almonds out of its market, should be pursued through the new World Trade Organization. But beyond obtaining access to Korea's markets, Washington must put other Asian nations on notice that aping the Japanese model of export-led growth through fortress home markets amounts to unfair competition and will not be tolerated. That's one key principle that should guide U.S. trade policy in the months to come.