From The Dong-A Ilbo: U.S. Export Promotion

In 1965, the administration led by President Park Chung-hee formed a council on export promotion and expansion attended by economy ministers and business leaders.

The administration believed that exports were the only way to prop up South Korea. Hosted by Park, the meeting met every month for almost 15 years until Park was assassinated on Oct. 26, 1979.

At the meetings, participants investigated export trends by month, item and region, discussed measures to increase exports, and made decisions. Park also commended those contributing to export growth.

Along with the Saemaeul (New Community) movement, the export meetings were considered one of Park's most successful economic and social policies. The government assessed corporate performance by the amount of exports denominated in dollars and provided all kinds of support, such as funding and awards to successful companies and entrepreneurs.

Encouraged by the incentives, industrial leaders strived to explore and open up global markets. Occasionally export promotion policies resulted in breaching a moral hazard or politico-business collusion. It did, however, significantly affect South Korea and its people in a positive way.

U.S. President Barack Obama announced on March 11 that he would form the Export Promotion Cabinet with participation by agencies that deal with exports and the Export Council, a presidential advisory committee on international trade.

He said the United States should compete against other nations in exports and that Washington will support U.S. exports. He also urged China to allow its currency to appreciate, saying Beijing would contribute to addressing global imbalances if it moves toward market-friendly foreign exchange rates. By doing so, the Obama administration, which promised to create 2 million jobs by doubling U.S. exports in five years, is apparently accelerating its export drive.

The U.S. trade deficit came to $711.6 billion (64,3225 trillion yen) in 2007 and $695.9 billion in 2008. Though its imports sharply decreased due to the global economic crisis last year, the U.S. trade deficit for 2009 amounted to $380.7 billion.

The trade deficit and the U.S. fiscal deficit have been called "twin deficits" and have fueled uncertainty over the U.S. economy. Washington's efforts to bolster exports will have a positive impact not only on its own economy but also on the global economy. Its export promotion policy, however, will probably ignite trade disputes with Asian nations, especially China.

Given the possibility of trade disputes, our nation should prepare itself for potential challenges.

Editorial Writer Kwon Sun-hwal (shkwon@donga.com)

From the website of The Dong-A Ilbo (March 13)