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The doormat nation

We will bring shame to ourselves if we keep doing nothing about Beijing’s retaliations.
Apr 07,2017
In 1388, Admiral General Yi Seong-gye — the commander of the king’s mission to strike the Ming Dynasty of China — carried out the historical withdrawal from Wihwa Island on the border between Goryeo and China to set the Korean people toward an entirely different destination by creating the Joseon Dynasty.

He based his game-changing decision on four grounds. But the main reason was that a small country can hardly attack a bigger country. Over six centuries have passed since then. Does his argument stand today? I don’t think so. With meticulously good planning, unified public support, and the cunningness to strike at particular weaknesses of the opponent, a small country can pose a formidable challenge to a bigger counterpart.

In our fight with China over the deployment of the American Terminal High Altitude Area Defense (Thaad) antimissile system in South Korea, we could use the so-called Market Economy Status (MES). Although there is no universal definition of MES under the World Trade Organization (WTO), China is not recognized as such by the United States and European Union, which command large influence in the WTO. Although China joined the WTO in 2001, it gets no anti-dumping protection from the global arbitrator of trade disputes. China has nowhere to protest even if it is slapped with an astronomical dumping margin.

China-bashing and the stigma of being a cheap producer have long been commonplace. Under the WTO, 32 percent of trade actions were targeted at China. It retained the world’s top rank in dumping accusations and unfair trade practices for 21 years in a row. Former Chinese President Hu Jintao had hoped to address this issue in 2003.

He pitched for China’s MES status in every summit talk. Through his marathon campaign, he received recognition from 36 nations starting with New Zealand by 2004. In 2005, South Korea formerly regarded China as a market economy — the first country to do so among China’s four major trade partners. The incident could have shaken the traditional alliance among Seoul, Washington and Tokyo. Then-President Roh Moo-hyun gave this generous gift to Hu during his visit to Korea.

Moreover, Seoul did not attach any conditions. Hu in return presented Roh with a tiger from Mt. Baekdu and promised to ease quarantine regulations on Korean kimchi. A trade ministry official recalled that there was no need to attach security issues to the economic favor as Korea-China ties were amicable and the two Koreas were on speaking terms. Hu had been sincerely grateful, he added. As of last year, China is recognized by 81 countries as a market economy.

But the campaign is hardly over as China still does not have the blessing of major economies like the U.S. and EU. U.S. President Donald Trump wants to use MES recognition as leverage. Japan and the EU won’t likely budge if the U.S. stands tough. The three economies claim China has yet to meet the criteria for a free market economy. Washington has recently slapped a major dumping penalty on Chinese steel products that more or less made imports impossible. China has filed a suit with the WTO on the case. Seoul would be delivering a hard blow to Beijing if it repeals its MES recognition. Its action could help reverse the international perspective of the Chinese economy.

The move could be seen as uncivil in international trade norms and practices. It also would be against the spirit behind our free trade agreement with China. Beijing could retaliate heavily as it did mercilessly in the garlic spat in 2000.

Our economic team under Deputy Prime Minister Yoo Il-ho had been demonstrating “strategic patience” with China even as it blatantly discriminates against Korean products, individuals and brands. It has been defensive, claiming the retaliation would soon wane and that it could not respond due to a lack of clear evidence. It was merely hoping that China would forgive and forget at some point. Moreover, the transition government stuck between impeachment and the next election does not have much power or will.

But China has gone too far. Car sales by Hyundai and Kia last month were cut in half from the year before. The government seemed to believe the damage from China’s Thaad retaliation would not go beyond the tourism and services sector. It was wrong.

We will bring shame to ourselves if we keep doing nothing. We could give the impression that we are feeble and easily tamed. Our pride is at stake.

We must make a stand strategically. Choi Byung-il, a professor at Ewha Womans University, advises that the outgoing administration must be strong to set the stage for the incoming administration. We wish to see Yoo’s economic team call out the injustices of Beijing.

JoongAng Ilbo, April 6, Page 30

*The author is a columnist of the JoongAng Ilbo.

Yi Jung-jae