EDITORIAL from the Korea Times on June 20)

'Buy China' Policy
Biggest Beneficiary of Free Trade Should Not Defy It

The reports that the Chinese government is showing signs of reverting to trade
protectionism have come at hardly a worse time.

Korea's economy, despite some optimism about a relatively swifter escape from the
global recession, still has a long way to go before regaining its health, as
shown by recent concerns about the falling prices of Korea's main export
products.
Some business papers, including the Financial Times and the Wall Street Journal,
reported that China has introduced an explicit ``Buy Chinese'' policy as part of
its economic stimulus programs, by obligating government procurement to use only
Chinese products or services unless they are not available within the country.
Beijing's move is understandable to some extent, considering the serious
unemployment problem in the world's most populous country amid the worst economic
crisis since the 1930s. Nevertheless, we can hardly hide our disappointment,
thinking China, the biggest beneficiary of free trade, seems to be biting the
hand that feeds it. And all the more so, because the same government has
criticized other countries, mainly the United States, for committing the same
mistake it is about to make and eventually forced Washington to somewhat withdraw
its own protectionist sentiment.
Even without China joining, the world is now gripped by perilous temptation to
rebuild trade barriers, as shown in similar moves made by French government in
auto trade and European Union's export subsidies, which forced developing
countries to counter with their own retaliatory steps, such as tariff increases,
tougher import licensing systems, technological regulations, antidumping and
other safeguard measures. Little wonder some trade watchers are seeing the
specter of the rampant protectionism that led to the dreaded "D" word ??? the
Great Depression ??? seven decades ago.
If and when the Chinese government's home product-first policy is implemented
despite Beijing's official denial, Korea will no doubt prove to be one of the
countries hardest hit, owing to its undue dependency on the giant neighbor in
both exports and foreign direct investment.
Worse, Seoul, which could avoid the brunt of the similar U.S. policy in the steel
industry thanks to the bilateral government procurement pact with Washington, has
no such agreement with Beijing, exposing itself quite vulnerable to the reported
buy Chinese policy.
Which is why the government should point out its unfair and unjustifiable aspects
harder than any of its foreign counterparts.
(END)