Recent Developments and Analysis of U.S.-South Korean Agricultural Trade

EC Agricultural Commissioner Ray MacSharry surprised many by suggesting dramatic reductions in EC commodity prices, which would in effect recouple much of its agriculture with world prices. In July, all twelve EC agriculture ministers accepted the MacSharry proposal as the basis for negotiation. The entire package will be voted on in October 1991, and the general consensus is that some version of the MacSharry proposal will be adopted at that time. There exists a real possibility, therefore, that the European Community will eventually find an agricultural price reform proposal that is acceptable to the United States and other GATT participants. Should this occur, it will inevitably be in the closing moments of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations. One can then imagine a scenario in which the South Korean or Japanese negotiators are forced to decide between accepting a proposal that is politically unacceptable at home or being blamed for the failure of the GATT round. If this situation occurs and if the round fails, the South Korean and Japanese negotiators will be criticized in the United States for having assumed that the U.S. and EC negotiators would fight to a standstill and that, by adopting a wait-and-see attitude, the South Koreans could have avoided the ill will that the GATT negotiations have generated.