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Garlic Dispute Casts Overshadow to Sino-Rok Trade Ties
A trade dispute between China and the Republic of Korea (ROK), concerning garlic, has cast a shadow over the two countries' trade relations.
"The trade volume currently involved in the trade dispute is not large enough to seriously influence the bilateral trade, but the effect could grow if the situation worsens,'' said a Beijing-based trade analyst.
The ROK Finance and Economy Ministry declared recently that beginning June 1, the ROK would slap a tariff rate as high as 315 per cent on imported garlic.
As a major garlic exporter to ROK, China regards itself as the target of unjustified trade protectionism.
The Ministry of Foreign Trade and Economic Co-operation (MOFTEC) reacted quickly, declaring a ban on mobile phones and polyethylene imports from the ROK.
China imported US$73.5 million worth mobile phones and US$340 million in polyethylene products from the ROK in 1999, while its garlic exports to South Korea were valued at US$15 million during the same period.
The total volume of the three products involved in the trade dispute adds up to US$428.5 million, accounting for a mere 1.7 per cent of the two countries' aggregate trade volume in 1999.
The volume of trade involved in the trade war becomes even less significant in light of the fact that Sino-ROK bilateral trade during the first four months of this year increased by 47.2 per cent.
Statistics from China's General Administration of Customs reveal that during the first four months of this year, two-way trade between China and the ROK rose to US$10.1 billion. China's exports to South Korea leaped by 60.3 per cent over a year earlier to US$3.3 billion and its imports grew by 41.5 per cent to US$6.8 billion.
According to China Economic Times, the ROK is conducting anti-dumping investigations on Chinese bicycles and soda ash, a raw material used in manufacturing batteries and glass.
An official from the ROK Embassy to China insisted that the garlic dispute needs not to be associated with any other trade issue between China and South Korea.
But analysts said no matter what South Korea's true intention are with the anti-dumping investigations, they may trigger an escalation of the trade war.
"If that happens, we could not predict how the two countries' trade curve will move in the following months of this year,'' said a trade analyst who declined to be named.
The ROK Embassy official told Business Weekly that his government is actively seeking dialogue with MOFTEC to solve the issue.
"We'd like to meet to find some kind of compromise as soon as possible,'' he said.
He said there might have been a delay in his government's effort to solve this trade issue because it has been very busy with the historic meeting between its President Kim Dae-jung and the Democratic People's Republic of Korea's leader Kim Jong-il.
He said South Korean government officials would come to Beijing to discuss the garlic issue with China.
Before China retaliated, it had proposed to discuss the issue with ROK to find a solution acceptable to both sides.
But the talks broke off because of ROK's insistence on its own position, according to MOFTEC spokesman Hu Chusheng.
The spokesman said that the ROK's unilateral action of limiting garlic imports has seriously hampered bilateral trade and economic ties between the two countries.
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