South Korea's Agricultural Trade Dilemma: Open Markets or Protectionism? Beyond the China-South Korea Free Trade Agreement

Abstract

The China-South Korea Free Trade Agreement (FTA) was signed in June 2015, and entered into force in December of the same year. The FTA features wide coverage. It also presents a high degree of openness in market access. However, whilst South Korea sees economic globalisation and trade liberalisations as desirable goals, it maintains a high level of protection over agriculture in that major agricultural products are either completely excluded from tariff elimination or subject to minimal tariff reduction. This is not something that is specifically targeted at agreements with China. Indeed, South Korea has a long tradition of protectionism and treating agricultural trade differently because of deep concerns about domestic food security and preserving the livelihoods of rural workers/domestic farmers. Given these restraints, whether or not it will grant foreign competitors greater access to its domestic markets for agricultural products, or continue to maintain protectionist policies is questionable. This paper uses the China-South Korea FTA to analyse South Korea’s decades-old agricultural trade dilemma of subscribing to open markets or adhering to protectionism, and further identifies potential strategies to resolve the conflict between the emerging global trend and national interests. It concludes that in the future South Korea will eventually need to open its domestic markets. Open markets will not ruin South Korea’s agricultural and rural economy. Instead, they will bring more opportunities and dynamic gains to South Korea and help it use its resources in the most efficient way.