US warns South Korea to lift import barriers. From insurance to beef, firms say they are frozen out

By , Staff writer of The Christian Science Monitor

It will be a short honeymoon for the new government of South Korea - no matter who wins the election. Clayton Yeutter, the United States trade representative, says he intends to pursue quickly a growing number of trade disputes between the two countries. Mr. Yeutter, at a breakfast meeting with reporters, said there have been ``myriad issues in which the Korean government has been extremely protectionist'' at a time when its trade surplus with the US has been growing. Through October, South Korea exported to the US $8.4 billion more than they imported. For all of 1986, Korea exported $7.6 billion more than it imported.

``I probably get more letters today complaining about Korean trade practices than I do any other country in the world,'' Yeutter said. The trade ambassador said the US won't wait long before acting, ``because we can't afford to shelve them [the complaints] since they have merit.''

The US is upset over implementation of an agreement last year to open up Korea's insurance market to US companies. Yeutter maintains that US insurers have experienced ``considerable difficulty'' getting the necessary administrative approvals to begin operations.

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``This merits attention because it violates the spirit of the agreement,'' Yeutter says.

American farm products are also being unfairly kept out of Korea, Yeutter says. For example, the US would like Korea to open up its market to US tobacco growers in the same way that Taiwan and Japan are now allowing in US cigarettes.

US beef processors are also unhappy that Korea bans the import of beef to protect its own industry. Trade officials say Korea had promised to lift this ban at the end of the year - once its elections are over. US companies are particularly eager to sell beef in the country during the Olympics next summer. ``It is an area that shows good growth potential,'' a US trade official says.

The US has also fought with the Koreans over limits on potatoes and other agricultural products. In addition, Yeutter says the US would like the Koreans to enforce intellectual property agreements better.

For its part, South Korea maintains it must export more than it imports to pay off its large foreign debt resulting from loans used to build factories.

US officials have also been loath to take any trade actions that would interfere with Korean democratization. The State Department has been careful not to fan anti-American embers that are burning in Korea.

In the trade area, this has meant the US has not changed Korea's status under the Generalized System of Preference, which gives that country's products low tariffs in the US. There is pressure from Congress, for example, to remove Korea and other Asian trading nations from the GSP to better reflect their changing industrial status.

In another trade matter, Yeutter said the US would once again discuss the issue of opening up the bidding process on the $8 billion Kansai airport in Japan when Prime Minister Naburo Takeshita visits Washington next month. Yeutter hinted that he believes there is some progress on the issue in Japan but would not elaborate.

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