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CHUNG Sangho

FTA Talks: Lost in Translation?

CHUNG Sangho

Mar. 29, 2006

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People living in different cultures see things differently. Although the ongoing globalization process has somehow narrowed the differences, there is still a yawning gap along the national border. This was vividly displayed at a recent meeting in Seoul discussing free trade agreement between the US and Korea.

Speaking before a group of specialists at Samsung Economic Research Institute on March 20, Tammy Overby, the president of the American Chamber of Commerce in Korea, underscored the importance of communicating the needs of the businesses to government policymakers and the benefits of the free trade agreement to the general public.

At the end of the speech, Ms. Overby posed the following question for further discussion: "Why are Korean businesses not responding enthusiastically to the news and leaving everything to government officials to handle? The American counterparts are actively making suggestions to their government for doing it better and in more advantageous way for their benefit."

As any Korean with a modicum of knowledge on the intricacies of Korean politics is well aware, such reluctance on the part of local businesses to come forward in an important matter like this stems from their understandable fear that it will only arouse the public's anti-corporate sentiment.

In particular, leading Korean companies are afraid that they would be singled out as a 'sellout' by powerful farm lobby groups who are highly likely to put up a fierce fight before and during the conclusion of the FTA.

In her own words, it is just like a situation where you don't want to stick up your head because you know it will get chopped off.

A participant answered Ms. Overby's question saying, "The Korean companies are cautious about expressing interest in the US-Korea FTA because they are concerned about the adverse effects on domestic industry."

She countered that she did not understand why Korean businesses were so insecure about their competitiveness. They are, after all, No. 1 in so many different product categories in the world, she said.

Another participant explained that their lack of enthusiasm was justified because once the deal goes through everything will be in America 's way, tilting the playing field toward American businesses.

She responded, "It's called the global standard, not American standard."

The participant asked, "Have you seen the WBC games lately? That's what we are worried about what's going to happen once the FTA deal takes into effect."

He was saying that the post-FTA rules would favor the American side, just as organizers and umpires of the recent World Baseball Classic games rigged the games schedules to their advantage and made what appeared as intentionally unfair calls in critical moments of the game.

This is exactly the difference in perceptions held by Americans and Koreans, I thought. Koreans saw in alleged "rigging" of the baseball event the 'arrogance' and 'one-sidedness' they think they see in the US government negotiations. They easily make connection between WBC organizers and US government officials who 'conspire' to win the game and hog the glory.

This would look preposterous in the eyes of any decent American. Bending the fair-play sportsmanship rules for political purpose? C'mon, they will say, stop this nonsense. They will recoil at the thought of sports being controlled by bureaucratic decrees.

In Korea, however, politics rules over everything. This is still the case in the perceptions of most Koreans even though they are in transition to a full democracy. In Korea, no place is quite too far from the reach of government. This is even more so in matters related to business.

This is why at many seminars and conferences, Korean academics or businessmen usually end their conclusion of discussion on business topics with a plea for government intervention: "government should do this or that to support the private sector." Needless to say, this type of thinking - relying on government for all kinds of solution - is heavily influenced by the omnipresence of politics and government in their everyday life.

Admittedly, this accent on dirigisme is not limited to Korea. It is also found in Japan and China, where Confucian respect for power runs high. Indeed, some of this is also visible in countries such as France, Italy and Germany where the power of central government until very recently rode roughshod over the private sector.

Old habits die hard, especially in Korea. It's time that Koreans understood the idea of "enlightened self-interest" that guides the relationships among nations. The fact that Korea is ready to negotiate an FTA with the US is a proof that it's willing to go halfway for its national interest.

Korea lives by trading. In trade, there's no zero-sum game. It's time for Korean business community to begin talking with its own government to make sure that their national interest is better served in an enlightened way. To do this, it's the job of businessmen themselves to depoliticize their argument to keep it focused on business interest. Otherwise, Korea runs the risk of repeating its mistakes of blaming both the government and business for every bad agreement the public denounces.

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