Asia Institute Seminar
“Free Trade and the Status of SMEs in the global economy
21st April, 2012
Clyde Prestowitz
Founder and President of Economic Strategy Institute
Former counselor to the Secretary of Commerce
On Free Trade
Emanuel Pastreich:
The proper relationship between market liberalization as part of larger trade liberalization efforts and the need to protect agricultural industry has become an enormous issue in Korea, debated at every level of society and it will be one focus of attention in the upcoming election. As the issue is generally treated in a symbolic manner (concerns about mad cow disease rather than a debate on the concrete impact of market liberalization on the agricultural sector) there is much confusion as to what exactly is at stake. That said, there is a far wider consensus in Korea than is the case in other countries about the importance of trade to Korea’s economic growth. Most Koreans seem to believe that Korea has no choice but to trade.
Clyde Prestowitz:
When you say “there is a wide consensus,” what exactly do you mean? “Trade” implies a two-way street, that one should both buy and sell through trade and that both are good. Are you saying that there a consensus in Korea that Koreans need to buy or that they need to sell?
In my experience, I would say, most Asian countries, with one or two exceptions, focus on exports, on selling. They know that if they want to export, they sometimes have to buy something in return, but they don’t really want to buy things. So they enter into market opening agreements in which they agree to open their markets in return for overseas market access, but typically the Asian country’s market doesn’t open very much, even after the agreement is implemented. Asian nations feel a conflict because they know they should be buying because of the agreements, but they also know that buying is not their interest. I doubt there is a consensus in Korea about the value of trade, as opposed to the benefits of exports. Exports are something most everyone can agree is a good thing.