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Korea's U.S. Beef Brouhaha

Newsweek,  June 9, 2008

 

 

 

President Lee Myung Bak's removal of restrictions on U.S. beef has plunged his administration into a crisis that could imperil a free-trade pact with the U.S.

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South Korean riot police disperse protesters as they try to march to the Presidential House after a candlelight vigil against US beef imports, in Seoul on June 8, 2008. Kim Jae-Hwan/AFP/Getty Images

 

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South Korean protesters clash with riot police arround a police bus as they try to march to the Presidential House after a candlelight vigil against US beef imports, in Seoul on June 8, 2008. Kim Jae-Hwan/AFP/Getty Images

Rarely has a newly anointed Korean President fallen so far and so fast. Less than four months into a five-year term, Lee Myung Bak's decision to remove restrictions on U.S. beef has sparked widespread protests over food safety and engulfed his administration in a crisis that threatens a free-trade agreement (FTA) between the two countries. Lee's approval ratings have plunged to new lows, and opposition politicians are planning to boycott Parliament.

It wasn't supposed to happen this way. Lee had strong voter backing after winning a landslide victory in December. on Apr. 18, Lee, eager to cement ties with his country's closest ally, lifted the ban on U.S. beef imports for the first time since it was re-imposed last year. Korea had banned all American beef in 2003 following an outbreak of mad cow disease in the U.S. Seoul briefly allowed in boneless beef from cattle younger than 30 months of age before suspending that last year when bone chips turned up in shipments.

Seoul had hoped to coax the U.S. Congress into ratifying a free-trade accord, which the two governments signed last year. The lifting of the ban came on the eve of Lee's first summit with President George W. Bush in the U.S. in April. Korea was once the third-largest U.S. export market for American beef, with an annual turnover of more than $800 million a year. The on-again, off-again beef ban had fueled opposition to the free-trade pact among key members of the U.S. Congress, including Senate Finance Committee Chairman Max Baucus, from the beef-producing state of Montana. A grand gesture from Seoul might do the trick, was the thinking.

Protests Outside Seoul's Blue House

So much for grand gestures. For the past three nights, as many as 60,000 farmers, students, and housewives have demonstrated against the resumption of American beef imports. They have jammed Seoul's streets leading to the Blue House, the presidential residence. Many of them have shouted slogans demanding Lee's ouster for risking public health, and accused the Korean leader of kowtowing to Washington. Some think Seoul could have let in beef from young cattle bred in the U.S. but kept out meat from older cattle, which are more susceptible to mad cow disease. Korea's neighbor Japan bans imports of beef from older cattle.

Lee's loss of popular support has been swifter than anything ever experienced by a Korean President. His approval ratings (BusinessWeek.com, 12/18/07) are now below 20%, down from almost 60% in early March. And a June survey by pollster Korea Research and YTN cable news network has shown that 87% of those polled expressed disappointment with the government's talks with U.S. officials over beef. "We have reached a point where we can't expect much political leadership in Korea," lamented Lee Hahn Koo, a senior member of Parliament from the ruling Grand National Party, on June 9.

Government officials worry that the row could derail the free-trade pact, which experts estimate could boost two-way trade by $20 billion annually. Opposition lawmakers have boycotted a new session of parliament this month, threatening to shelve the trade pact for now. "Given huge political pressures, it would be difficult even for the Korean National Assembly to ratify the FTA unless the beef issue is resolved," says a senior aide to Lee who asked not to be identified.

Rising Inflation Hurting Consumer Confidence

Lee's misfortunes aren't only beef-related. His choice of policymakers, who pushed for export-fueled growth but didn't worry enough about inflation, hasn't helped. Amid soaring oil and material prices, Lee's government allowed the Korean currency, the won, to depreciate by about 10% against the U.S. dollar. That helped propel inflation to a seven-year high of 4.9%. Now with consumer confidence at a low ebb the government faces the prospect of missing its target for 6% economic growth this year. Private economists forecast growth between 4% and 4.9%, compared to last year's 5% growth and 5.1% in 2006.

The brouhaha over beef is interfering with Lee's plan to institute pro-business reforms. He is pushing to privatize government assets that would free up tens of billions of dollars to stimulate the economy as well as an ambitious tax reform package. Also on the agenda: a tougher hand with labor unions and deregulation of the financial-services sector. "Lee's blueprint for change is fading badly even before he opens it," says Park Gil Sung, a sociology professor at Korea University.

Seoul is hoping Washington can step in with a diplomatic solution to defuse the crisis. on June 9, Lee dispatched a team of negotiators to Washington, asking them to make sure shipments of beef from cattle older than 30 months won't be allowed. At the weekend, Lee called Bush for a 20-minute phone conversation during which Bush, who is scheduled to visit Seoul in July, told Lee that Washington would cooperate closely with Seoul. He said the U.S. is "ready to support American cattle exporters as they reach a mutually acceptable solution with Korean importers on the beef trade," according to White House spokesman Gordon Johndroe, who gave no further details.

The Beginning of a Trade War?

Eager to appease an angry public, Seoul is grappling for a solution. It could press for a renegotiation of the terms of the beef trade. But asking the U.S. back to the table or scrapping the existing accord could trigger calls in the U.S. for tit-for-tat amendments to the free-trade pact. Detroit's concerns that Korean cars and parts will surge into the U.S., risking even more U.S. auto industry jobs, might find a more receptive audience in Congress.

Could the tensions develop into a full-blown trade war? It's possible, says Han Sangwan, chief economist at think tank Hyundai Research Institute in Seoul. The beef dispute could become a bigger issue if it's taken up during this year's U.S. Presidential election. The Korean public could inflame tensions, too. "Unless the U.S. shows flexibility over its beef exports to address Koreans' concerns over food safety, a wholesale boycott of U.S. products could follow," says Han. "And that could trigger protectionist retaliation." The collapse of an FTA would mean a "serious chasm between the two," he adds.

Lee now appears to be reconsidering the hard-charging style that he displayed as the CEO at Hyundai Group. The forcefulness that worked at a conglomerate that has long epitomized Korea's breakneck industrialization is being regarded as a liability and the mark of a leader who is deaf to public demands. In a meeting with Catholic priests on June 9, Lee admitted that he had made policy mistakes and hinted at a Cabinet shakeup. Already seven top presidential aides have offered to resign. Winning back the public's trust won't be easy for Lee.

Moon is BusinessWeek's Seoul bureau chief.

 

 

 

 

News Analysis

An Anger in Korea Over More Than Beef

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By CHOE SANG-HUN
Published: June 12, 2008
The New York Times

SEOUL, South Korea ? When tens of thousands of South Koreans spilled into central Seoul on Tuesday in the country’s largest antigovernment protest in 20 years, the police built a barricade with shipping containers. They coated them with oil and filled them with sandbags so protesters could not climb or topple them to march on President Lee Myung-bak’s office a couple of blocks away.

Lee Jin-man/Associated Press

Protesters in Seoul, South Korea, expressed their anger behind a barricade of shipping containers that had been erected to keep them from the president’s office.

Faced with the wall, people pasted identical leaflets on it, their message dramatically summarizing Mr. Lee’s image and alienation from many of his people: “This is a new border for our country. From here starts the U.S. state of South Korea.”

In the background, a female voice from a battery of loudspeakers led the crowd to chant: “Lee Myung-bak is Lee Wan-yong!”

Lee Wan-yong is an infamous name every South Korean child knows. A royal court minister at the turn of the last century who helped Imperial Japan annex Korea as a colony, he is Korea’s No. 1 national traitor.

The protests illuminate the shift in President Lee’s political fortunes. When he was elected last December, South Koreans hailed him as a long-awaited leader who could salvage their country’s alliance with the United States, which was strained under Mr. Lee’s left-leaning predecessor, Roh Moo-hyun.

Only six months later, Mr. Lee finds Koreans vilifying him as something Mr. Roh famously said he would never become: “a Korean leader kowtowing to the Americans.”

“While championing a pragmatic leadership, Mr. Lee overlooked Koreans’ nationalistic pride,” said Choi Jin, director of the Institute of Presidential Leadership in Seoul. “If what troubled Roh’s presidency was too much nationalism, Lee’s problem is a lack of it.”

The chants showed that the demonstration was not merely about the president’s unpopular decision to lift an import ban on American beef. It also tapped into Korean pride.

This is a small country in a strategic location with a deep sense of grievance about being manipulated by the great powers around it. Chinese emperors demanded tribute from Korea; Japanese occupiers forbade Koreans to speak their own language; American, Chinese and Russian cold war rivalries divided Korea in two. While mostly approving of their alliance with the United States, South Koreans remain acutely sensitive to any suggestion that they must do America’s bidding.

Mr. Lee’s slumping popularity was sown in his first glorious moment as president.

On April 19, he became the first South Korean leader to be invited to the United States presidential retreat of Camp David, Md. Days before the visit, his aides billed the meeting with President Bush as a momentous event ? one that never would have been granted to leaders like Mr. Roh, who was often accused of being too nationalistic and anti-American.

South Koreans who had fought alongside the Americans during the Korean War in the early 1950s took to the streets in joy. They trusted Mr. Lee to save the country from what they called “leftist, anti-U.S. and pro-North Korean elements,” like Mr. Roh.

On the eve of the summit meeting, Seoul agreed to lift a five-year-old ban on American beef imports, imposed after a case of mad cow disease was confirmed in the United States. By traveling with a political gift for Mr. Bush, Mr. Lee demonstrated how eager he was to rebuild ties with Washington.

Little did he apparently imagine the reaction at home, among young South Koreans who had been watching with a cold eye.

“What he did was little different from an old Korean king offering tribute to a Chinese emperor,” said Kim Sook-yi, a 35-year-old homemaker who joined the protest on Tuesday with her two children. “This time, we give a tribute to Washington? It’s humiliating, bad for education for Korean children.”

The demonstrations began on May 2, when hundreds of teenagers held a candlelight vigil in Seoul, and quickly snowballed. By this week they had become so overpowering that the entire cabinet offered to resign.

Foreign bloggers watching the brouhaha ask: Why would thousands of South Koreans join protests about mad cow disease but not ask why Americans are not protesting American beef? Would South Koreans demonstrate with the same intensity if the beef came from Australia or New Zealand? What about Korean-Americans who eat American beef?

To many South Koreans, however, the beef dispute is not entirely about health concerns or science. It is not entirely about the economy, either ? beef from the United States is half the price of homegrown meat. To them, it is also the latest test of whether their leader can resist pressure from superpowers, even if there is good reason for the pressure, as is the case in the beef dispute. South Korea had promised to lift the ban once the World Organization for Animal Health ruled American beef fit for consumption, as it did in May last year.

South Korea has built the world’s 13th largest economy largely through exports. Nonetheless, historical resentments linger.

South Koreans in their 40s remember words from a popular childhood song handed down from their fathers and grandfathers: “Don’t be cheated by the Soviets. Don’t trust the Americans. Or the Japanese will rise again.” Koreans still chafe at the fact that the United States and the Soviet Union divided Korea after liberating it from Japanese colonial rule at the end of World War II.

Whether a South Korean leader can navigate this current of nationalistic sentiment can make or break his career.

When two South Korean teenage girls were killed by an American military armored vehicle six years ago, it first appeared to be nothing more than a tragic traffic accident. But many young Koreans who had grown to regard the American military presence with humiliation rallied in protest.

Mr. Roh, a relative political neophyte, quickly rode the wave into election victory.

But South Koreans soon grew tired of Mr. Roh’s ideological pronouncements, which often strained the alliance with the United States. They gave a landslide victory to Mr. Lee, who promised to bring pragmatism into the presidency.

“Lee was overconfident,” said Kang Won-taek, a professor of political science at Soongsil University. “He thought since people rejected Roh, he could go just the opposite.”

Many experts in Seoul draw a careful line between nationalism and anti-Americanism among Koreans. They say the recent series of demonstrations were more an expression of the former than the latter. But the divide gets thin sometimes.

Alexander Vershbow, the United States ambassador in South Korea, got a taste of the simmering anti-American sentiment when he emphasized the safety of American beef last week. “We hope that Koreans will begin to understand more about the science and about the facts of American beef,” he said.

The next day, politicians and protesters called the comment an “insult to all Korean citizens.”

Jeon Sang-il, a sociologist at Sogang University, said the men seemed to have shot themselves in the foot.

“These days, Koreans say there are only two anti-Americans in South Korea,” Mr. Jeon said. “One is Lee Myung-bak and the other Vershbow. They stoked anti-American sentiments with what they did and what they said.”

Mr. Vershbow expressed regret that he was misunderstood.