The lack of reference to anti-protectionism in a joint statement released after a meeting of G-20 finance ministers and central bank governors over the weekend poses greater risks to trade-reliant Korea, observers said.
The economic policymakers of the Group of 20 leading countries wrapped up their gathering in Baden-Baden in Germany on Saturday, but failed to reject protectionism, reportedly due to strong opposition from the US under trade protectionist President Donald Trump.
US Secretary of the Treasury Steven Mnuchin (right) waves as he and other participants in the G20 Finance Ministers and Central Bank Governors Meeting pose for the Family photo in Baden-Baden, southern Germany, on Friday. Seen on the left is South Korea's Finance Minister Yoo Il-ho. (AFP)
“Some countries including Australia made strong comments and asked why the G-20 did not adopt the abolition of protectionism in the communique and why the discussion was not as lively as the one last year. France noted that this is going backward in the achievement of the (G-20) meeting,” Korea’s Finance Minister Yoo Il-ho told reporters in Baden-Baden, Germany.
In the previous meetings in 2015 and 2016, the G-20 joint statement had included a sentence, “We resist all forms of protectionism.”
Asked whether the US opposed the inclusion of the anti-protectionism language, Yoo said, “Every country has different levels of reactions to protectionism” and only several countries strongly opposed the exclusion of an anti-protectionism phrase in the communique.
For Korea, seeking collaboration with international organizations is one of a few options to deal with the US’ stronger protectionist stance.
However, the absence of opposition to protectionism in the G-20 statement signals that Korea could face an uphill battle in Washington’s possible demand to rewrite a bilateral free trade agreement with Seoul.
Korea’s exports have just recently begun to sustain the local economy, turning from red to black in November and marking a steady rise for four consecutive months until February. Latest data from the Trade Ministry showed that exports in February surged 20 percent on-year, on the back of rising global oil prices and a recovery in world trade.
If Korea’s exports are hit by US protectionism, it will deal a major blow to the economy as domestic demand continues to plummet with a contraction in private consumption and weak facility investment.
To add to the woes, China is reportedly enhancing economic retaliation against the deployment of an advanced US anti-missile system called Terminal High Altitude Area Defense on the Korean Peninsula.
Under Beijing’s apparent order not to travel to South Korea, there are now fewer Chinese tourists being seen in central Seoul and Jeju Island, once popular spots for Chinese travelers. Korean conglomerate Lotte is also suffering business troubles at its retail outlets in China, due to its recent decision to offer its golf course in Seongju, southeast of Seoul, as the site for the defense system.
Regarding the issue, Yoo said Seoul does not have hard evidence to assert that Beijing has retaliated economically against the THAAD deployment.
Asked whether Korea could say to China that economic issues should be separated from politics, Yoo said, “I will think about how we can wisely convey our message to China.”
He failed to meet his Chinese counterpart Finance Minister Xiao Jie during the G-20 meeting due to differences in their schedules, according to Song In-chang, deputy finance minister for international affairs.
By Kim Yoon-mi (firstname.lastname@example.org)