[COLUMN] Dual strategy to head off U.S. protectionism

Lim Chang-won Reporter Posted : 2018-01-30 13:12 Updated : 2018-01-30 13:12
글씨작게 글씨크게

[Aju News DB]

SEOUL, Jan. 30 (Aju News) -- The global economy is struggling with two conflicting issues of free trade and protectionism. Neoliberalism, which began in the 1970s, contributed greatly to the quantitative growth of the global economy and promoted globalization. As China and other emerging economies have entered the global market in large quantities, profits from globalization have shifted from developed countries to emerging economies.

The origin of problems is due to the inequality of profit distribution. It is a common view among developed and emerging countries that the absolute amount of pie is concentrated on the minority. Some developed countries such as the United States believe protectionism is inevitable because globalization hurts their economy more and more. Emerging economies, on the other hand, are firmly convinced that free trade will ultimately resolve the disparity.

The Trump administration imposed safeguard measures on the assumption that imported products such as washing machines, refrigerators, and solar cells were dealing a fatal blow to the US industry. As a result, Korean and Chinese exporters were hit hard. Probably, the fire could spread to automobiles, steel and semiconductors, and such a mood may continue until the midterm elections in November.

We are the victim of a struggle between the United States and China, which is trying to become a new superpower like a shrimp popping into whale fighting. More worrisome, it may dash cold water on our economic recovery.

After being hit by China's THAAD retaliation last year, we were in trouble from the start of this year because of U.S. protectionism. Although a strong anti-trumpet front to protect free trade has been formed among emerging and European countries, a transitional environment has been created to have a big impact on our trade.

The tactics of Japan, which wisely avoided a U.S. offensive with a strategy of toughness and moderateness, is a good reference. Japan needs to revive its economy in order to check China and moves Washington to the point that it can check China's influence in Asia. We must strongly express our position through the WTO, lawsuits in the United States and FTA negotiations.

On the other hand, it is necessary to appropriately use the political card of our alliance with Washington. We must quickly establish a dual strategy of exporting high-end products and producing mid- and low-end products in the United States.

(This column was contributed by Kim Sang-chul, a former supervisor of KOTRA in Beijing and Shanghai.)