Trade Liberalization in South Korea's Rice Sector: Some Policy Implications
Case Study #10-6 of the Program: ''Food Policy For Developing Countries: The Role Of Government In The Global Food System''
Hong, Sukjong; Cheng, Fuzhi
The tension between the liberalizing agenda of the World Trade Organzation (WTO) and the policies of industrial-country members of the WTO has been framed as a battle between developed countries and less-developed countries. In this contentious arena, one of the charges persistently brought against South Korea is that its domestic support policies distort the distribution of potential trade benefits that would be generated by access to its domestic rice market. This market is considerable, as South Korea, along with Japan, is one of the world's biggest consumers of japonica or shortgrain rice. The issue of domestic support for rice has been central to the dialogue on South Korea's trade policy since the 1994 Uruguay Round of the WTO, when South Korea committed to liberalizing a large share of its agricultural and fisheries markets by 1997 and its staple foods market, including rice, by 2004. Within a decade national imports of rice increased from 51,000 tons to 205,000 tons, and in 2006 Korea signed an agreement with the Association of Southeast Asian Nations (ASEAN) to double imports over the next 10 years without compensating for farmers' income losses. But trade advocates still criticize these steps as a deferral of full liberalization. At the same time, Korean farmers and civil society groups have charged that these measures reduce the nation's primary staple grain to a tradable commodity and threaten the livelihoods of Korea's historically significant base of farmers. Public demonstrations to block the passage of parliamentary votes on free trade agreements have become frequent occurrences in the national arena, and Korean farmers have linked up with the global food sovereignty movement in visible solidarity actions at the site of WTO ministerial meetings. Trade in rice is clearly a politically charged debate in South Korea, intersecting discussions of national food sovereignty, rural development, and cultural and social identity. The country's high dependence on manufacturing exports and its high protection in the rice sector present a major dilemma within the government's trade agenda. This situation is further complicated by Korea's sidestepping of the multilateral bargaining table in pursuit of bilateral free trade agreements (FTAs) and regional agreements within the Asia-Pacific Economic Cooperation (APEC) forum and with ASEAN members. As of 2006, Korea had pursued FTAs with Canada, China, the European Union, Japan, Mexico, Singapore, and the United States. But agricultural trade issues still figure prominently in pending discussions with China, ASEAN, and the United States, all of which also export rice. Evidently, the primary benefit to Korea in these agreements is increased market access for its manufacturing and industrial sector. Your assignment is to suggest a long-term plan for the South Korean government that will address the international trade issues as well as the nation's food needs and the future viability of the farming sector. With food aid to the Democratic People's Republic of Korea still a pressing humanitarian need, propose an economic and political agenda for engaging in partnership with this country. What would a sustainable solution to these various trade and aid issues look like?
12 pp.©Cornell University, Ithaca, New York. All rights reserved. This case study may be reproduced for educational purposes without express permission but must include acknowledgment to Cornell University. No commercial use is permitted without permission.
Cornell University Division of Nutritional Sciences
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Previously Published As
Sukjong Hong, Fuzhi Cheng (2007). Case Study #10-6, ''Trade Liberalization in South Korea's Rice Sector: Some Policy Implications''. In: Per Pinstrup-Andersen and Fuzhi Cheng (editors), ''Food Policy for Developing Countries: Case Studies.''12 pp.