(EDITORIAL from the Korea Times on Feb. 17)

Economic Nationalism: Seoul Ought to Turn Trade Crisis Into Opportunity

Putting words into corresponding actions is difficult for individuals and
countries alike, and much more so in times of crisis, such as now.
One can reaffirm this hackneyed but time-tested phrase, given how major
governments of the world are acting to cope with the worst economic setback since
the 1930s. The latest case in point was the meeting of the Group of Seven
industrialized democracies in Rome last week.
U.S. Treasury Secretary Tim Geithner conveyed President Barack Obama's ``deep
commitment'' to sustaining free trade policies ??? just days after the U.S.
Congress decided on the obligatory use of domestic steel products in projects
funded by stimulus spending.
The fact that the so-called Buy-American provision has been somewhat eased from
its original version and the U.S. administration has mostly tried to discourage
its legislature's protectionist appetite will provide little comfort to trade
partners until Obama makes clear his intention to veto the bill, the outlook for
which should be said as mixed at best for now.
Little wonder the U.S. move has endorsed and triggered protectionist fervor
elsewhere, ranging from France's demands for using home-made auto parts to
Britain's depreciation of sterling.
Korea is certain to be hit hardest by this resurgence of economic nationalism,
not just because it is one of the countries most heavily dependent on foreign
trade for growth but because Seoul belongs to a group of countries whose
economies are contracting the fastest. It's difficult to understand in this
regard why Korea, the second-largest steel exporter to America, has yet to join
China and India in criticizing U.S. protectionism in the steel trade.
It may be because Korean products will be relatively less affected by the U.S.
move or because the bilateral trade ties, as shown by the Korea-U.S. Free Trade
Agreement, keeps Seoul from joining multilateral U.S. bashing. But the government
should look far more broadly and deeply than that.
Whatever the reason, Seoul's silence will likely do more harm than good to its
long-term strategy, as the nation should take the lead in global
anti-protectionist campaigns as the bridge between industrialized and
industrializing countries, and as a co-chairing country in the Group of 20 summit
in London in April. Washington should understand Seoul's position, especially
given the agreement on taking a joint stance against protectionism made over the
phone between Presidents Lee and Obama earlier this month.
It's time for Korea, one of the biggest beneficiaries of free and open trade, to
come forth as its greatest preacher and practitioner at a time when most
countries, particularly the hitherto leaders of industrial countries, seem to be
backing off somewhat.
This is no easy course of action for the world's 13th largest economy and its
11th largest trader to maintain in the future unless the nation readies itself to
back up its diplomatic initiatives with enhanced competitiveness of the domestic
industries, such as by diversifying export markets, heightening added value of
core products, increasing spending on R&D activities and cultivating quality
manpower.
President Lee has always called for turning crisis into opportunities. Unless his
government is ready and able to follow up on the presidential slogan, however, it
will end up as just another disconnect between words and actions.
(END)