Asia’s ‘Culture of Export’ 2: The Case of Korean Mercantilism


Part one is here. On the financial mercantilism rising in the wake of the Great Recession, go here.

Any foreigner living in Korea is bombarded with the notion of Korea globalizing. Its everywhere – both at the IR academic conferences, and in everyday life. The government-sponsored English agitprop network (Arirang) positively gushes about how cosmopolitan Korea is and how happy resident expats are to live here. Korean print media is constantly hyping this or that Korean star breaking into global attention. Yuna Kim in iceskating was last year’s rave; this year its Yong-Eun Yang the golfer. Korean films, we are told, have a worldwide audience, as does Korean pop music. Even Korean food they tell us, is poised for a global breakout. (I actually doubt all 3 claims; they are recycled endlessly like propaganda. In 32 years living in the US, I only saw 1 Korean movie – The Host – and never heard K-pop or saw a Korean restaurant. That hardly means they don’t exist in the US, but if they are as popular as the Korean government tells us, then I should have seen something.) And Koreans are downright obsessed with the numbers and kinds of foreigners living here, and multiculturalism is a raging debate right now in Korea.

Yet for some reason, this incipient globalization never seems to happen. And every once in awhile, you get a glimpse of the real story – the deep seated nationalism and the desire to have globalization occur on strictly Korean terms. Try here and here,  and note that the primary response to a trade deficit with Japan is the desire to reduce it through increasing self-sufficiency, a third worldist economic notion directly at odds with globalization.

This sorts of articles show you exactly the Korean ambivalence on globalization that prevents it from every attaining the global status it so desperately craves. I see this attitude all the time at conferences on the topic of Korean trade and IPE policy: exports are good, but imports are bad. For a raw, almost xenophobic, example of this mercantilist, illiberal spirit (trade surplus = health), try here.

So its great that Korea exports this or that to the world (food, cars, TVs), but Koreans clearly violate the spirit of the WTO by formally and informally discriminating (‘nationalist buying’) against imports. Koreans are downright desperate for global cultural recognition (endless stories on Korea’s ‘brand’ – whatever that means), but lots of knowledgeable people I know in academia still insist that Korea needs a positive current account and should mimic rather than import successful foreign products. Of course, you can’t have it both ways; you can’t demand ‘buy Korea’ from locals and then tell foreigners you are globalized.

Here a just a few examples. Imported goods are almost always far more costly in run-of-the mill stores. The best known stories are the 20-30% tariffs on cars imported into Korea. You’ve never seen as many Korean cars in the entire rest world as you do here in this one small market. Alcohol too has a extreme price differentials. A fifth of Jack Daniels costs $40 (see the picture above from my local grocery store)! Even something as mundane as scotch tape is hammered. Scotch brand transparent tape is 3 times the cost as the Korean brand. When I bought a TV, there was not even a discussion that I would buy a Sony or a Panasonic. They were a good 25% more costly, so of course, I bought the Samsung. And the cell phone sector too is overpriced, protected, and cartelized. Blackberry, Apple and Microsoft scarcely operate here. So forget about the easy compatibility of Windows Mobile or an I-phone.

This attitude is hardly specific to Korea. Lots of countries express a preference for mercantilism, and the everyday voter generally does not support free trade anywhere in the world. But economic nationalism is stronger in Korea than it was when I lived in Europe, and the cost differentials are more obvious and so extreme, there is no way they reflect just market pricing. Further, it jars badly with Korea’s constant repetition that it is globalizing. Because of course, globalization goes both ways. The flow of goods, people, ideas, etc. comes in and out. Little I have seen here or read in the literature or media suggests Koreans really want a lot of inbound traffic. Exports are great, but imports will probably bring swine flu. Incoming traffic is strictly controlled, especially of foreign people living here.

7 thoughts on “Asia’s ‘Culture of Export’ 2: The Case of Korean Mercantilism

  1. Pingback: Asia’s ‘Culture of Export’ (1): Persistent, Politicized Asian Imbalancing « Asian Security Blog

  2. Pingback: It’s the 1930s All Over Again… « Asian Security Blog

  3. Pingback: Korea and the G-20: An Exercise in Koreaphoria « Asian Security Blog

  4. Pingback: Asian Myopia on the Imbalances – Deficit Importers will Revolt in Time… « Asian Security Blog

  5. Pingback: The Korea-US Free Trade Agreement Serves Korea more than the US « Asian Security Blog

  6. Pingback: Economist Magazine Conference on Korea 1: Not Quite an Open Economy « Asian Security Blog

  7. Pingback: The Korean-German Unification Parallel; plus Blackwater … the Game? « Asian Security Blog

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s