Living in Seoul, I see articles on the free trade agreement (FTA) and protesters all over. The other day I was heading into a subway station and there was one guy with an anti-FTA sign shouting about the injustice of it all.
I don’t see what Korea could really gain from an FTA. Last year, 4,000 American cars were sold in South Korea, while South Korea exported 800,000 vehicles to the United States. I wanted to buy a Mustang here in Korea but a car that would cost me $22,000 in the US is close to $50,000 here in Korea. America sees a 13 billion dollar deficit and 80% of that comes from cars.
But the people who most oppose the FTA are farmers. Here in Korea where nearly everyone eats rice nearly every meal, you’d expect the people to demand good prices and more competition. That’s not the case, however. Rice here sells for 4x the international average. A 4 kg bag of plain white rice is at least $15 bucks in the supermarket.
Han Duk-soo, prime minister-designate of South Korea, said that if the United States insisted on including rice in the deal, “there will be no F.T.A.”
I think it’s clear that South Korea can’t afford free trade. It’s not really clear which path will be best for their economy. I suspect that the two sides will get something signed, but that it won’t be what American famrs or car manufacturers need to level the playing field.