Right now South Korea is working toward a free trade agreement with the U.S. It could increase trade between the two nations by $20 billion. Unfortunately, a mad cow disease scare could prevent that from happening.
The hysteria started when the first U.S. case of mad cow disease was detected in 2003. To put it in context, mad cow afflicted a single cow out of the more than 35 million slaughtered that year. That 1-in-35-million ratio has roughly held since then. U.S. beef is safe.
But South Koreans don’t seem to think so. U.S. beef was immediately banned. After quietly simmering in the background, the embargo has been cautiously eased in fits and starts. Last month, President Lee Myung-Bak proposed lifting most restrictions on importing U.S. beef. Politically, the timing could not have been worse. The Korean media has been in hysterics, adding tension to already fragile negotiations.
Korea’s domestic beef lobby has been more than happy to stoke the flames of fear. “Our competitor’s product will kill you,” seems to be their message, with the implied “only buy from us.” People believe them, too.
This is a shame. The benefits to all Koreans from freer trade far outweigh the benefits to a single industry from preferential treatment.
Truth be told, both sides are to blame for the U.S.-Korea trade impasse. Here in the U.S., the tide has also been turning protectionist. The arguments that American liberalization opponents are using are about as sound as their Korean equivalents.
One news outlet said that 94% of Koreans carry a special gene that makes them more susceptible to mad cow disease. That claim has since been exposed as fraudulent. In America, people like Lou Dobbs are claiming that trade costs jobs; but America has gained 26 million net jobs since NAFTA was passed. Wages are higher, too.
Empirical data and economic theory are both on the side of free trade. The people negotiating the U.S.-Korea trade agreement would do well to remember that, even if both the media and public sentiment are against them.