Europe Tears Down Borders To South Korea. Will Japan Be Next?

Bertel Schmitt
by Bertel Schmitt
europe tears down borders to south korea will japan be next

When a country gets desperate, it closes its borders to imports. It’s a sign of surrender: We can’t compete anymore, so let’s close the doors. Closed borders rarely create jobs. In the contrary, they drive prices up, and everybody pays. Import restrictions are the most insidious tax a country can levy on its citizens. And they readily pay for it. Trade wars are an easy sell. Especially to people who cannot balance their checkbook. The price will be paid later.

While the U.S. is closing the door inch by inch, the rest of the world goes the totally opposite way.

Korea signed a free trade deal with the EU yesterday, reports NPR. If approved by the EU parliament (pretty much a done deal), the agreement will come into force on July 1, 2011.

EU president Herman Van Rompuy, said that the pact “sends a strong signal that trade liberalization is key to the recovery of the world economy.”

British Prime Minister David Cameron hopes that the deal will be “laying the ground for further free trade agreements between Europe and other countries, including India, in the future.”

There’s another country that can’t wait: Japan. Japan hopes to follow in South Korea’s footsteps by rapidly striking a free trade deal with the EU, a senior Japanese official told AFP. Japan competes with South Korea in a number of areas including auto production. They want the same preferential access to the European market, home to half a billion people.

It’s not that the Europeans are opening up their borders out of the kindness of their hearts. They have a lot to export: Cars, machinery, foodstuffs. They learned that a common market is good for business. The European Commission estimates the deal will eliminate $2.1b worth of industrial and agricultural duties for European exporters to South Korea. The EU will cut some $1.53b of duties for Korean importers. Hyundais will be cheaper in Europe. BMW’s, Mercedeses, and Audis will cost less in South Korea. Both win, and amazingly, the Europeans win a little more.

I guess the U.S. will have to learn the hard way that a closed market is bad for business.

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2 of 11 comments
  • AaronH AaronH on Oct 07, 2010

    "Import restrictions are the most insidious tax a country can levy on its citizens" I would say Fiat Currency Inflation and Income taxes are worse. The USA is by FAR the most open market in the world! Almost all imports are subject to less than 3% duty.

  • JJ JJ on Oct 07, 2010

    I think when you compare a 1989 Trabant to a '89 Veedub Golf that's about all you need to know about protectionism in general. I think Ford would still be cranking out Crown Vics though if the US hadn't opened up it's market to foreign imports as much. They might even still have had bench seats...and maybe...carbs :)

  • Bd2 Other way around.Giorgetto Giugiaro penned the Pony Coupe during the early 1970s and later used its wedge shape as the basis for the M1 and then the DMC-12.The 3G Supra was just one of many Japanese coupes to adopt the wedge shape (actually was one of the later ones).The Mitsubishi Starion, Nissan 300ZX, etc.
  • Tassos I also want one of the idiots who support the ban to explain to me how it will work.Suppose sometime (2035 or later) you cannot buy a new ICE vehicle in the UK.Q1: Will this lead to a ICE fleet resembling that of CUBA, with 100 year old '56 Chevys eventually? (in that case, just calculate the horrible extra pollution due to keeping 100 year old cars on the road)Q2: Will people be able to buy PARTS for their old cars FOREVER?Q3: Will people be allowed to jump across the Channel and buy a nice ICE in France, Germany (who makes the best cars anyway), or any place else that still sells them, and then use it in the UK?
  • Tassos Bans are ridiculous and undemocratic and smell of Middle Ages and the Inquisition. Even 2035 is hardly any better than 2030.The ALMIGHTY CONSUMER should decide, not... CARB, preferably WITHOUT the Government messing with the playing field.And if the usual clueless idiots read this and offer the tired "But Government subsidizes the oil industry too", will they EVER learn that those MINISCULE (compared to the TRILLIONS of $ size of this industry) subsidies were designed to help the SMALL Oil producers defend themselves against the "Big Oil" multinationals. Ask ANY major Oil co CEO and he will gladly tell you that you can take those tiny subsidies and shove them.
  • Dusterdude The suppliers can ask for concessions, but I wouldn’t hold my breath . With the UAW they are ultimately bound to negotiate with them. However, with suppliers , they could always find another supplier ( which in some cases would be difficult, but not impossible)
  • AMcA Phoenix. Awful. The roads are huge and wide, with dedicated lanes for turning, always. Requires no attention to what you're doing. The roads are idiot proofed, so all the idiots drive - they have no choice, because everything is so spread out.