Nonsense, horsefeathers, and idle musings from a decade in South Korea (2002-2012).

20 December, 2012

South Korea: Donor of Foreign Aid to the United States

By Aaron
20 December, 2012

Suppose that your neighbor showed up one day and offered to take over the landscaping of your yard, free of charge, for the next year. Seeing that he's done good work on his own lawn, you waste little time questioning his motives and instead quickly take him up on his offer.

Now that you no longer have to worry about mowing your lawn, pruning your shrubs, and weeding the flower beds, you have a few extra hours each week to spend with the kids, tinker in your wood shop, and work at your real job making money. This additional time has, in short, made you wealthier.

In this scenario, your neighbor's wife and children might not be very happy that he's donating his time to you, as he now has less time for them and his own yard, and the local landscaping companies might wish that you'd paid them to do your mowing and pruning, but the bottom line is that you and your neighbor came to a voluntary agreement.

What would be your reaction, then, if the city council got wind of this agreement and, in the interest of "protecting" that landscaping company from "unfair" competition, decided to punish your neighbor and his wife for "dumping" subsidized (in this case, free) lawn care into your life? I feel safe in saying that you wouldn't take kindly to the city council's meddling in what is a private affair between you and your neighbor.

I offer this little horticultural parable after reading this in today's Joong Ang Daily newspaper:

The U.S. Commerce Department said Wednesday that it has reached a final decision to slap heavy anti-dumping duties on Korean-made washing machines.

In a ruling described by the American firm Whirlpool, the department determined that LG, Samsung and Daewoo have sold large washers in the U.S. at “dumping margins of 9.29 percent to 82.41 percent.”

The anti-dumping duties for the two leading Korean makers of electronics products - LG and Samsung - were set at 13.02 percent and 9.29 percent, respectively. 

It added that the three firms have also received “countervailable subsidies” of 0.01 percent to 72.30 percent.

The story goes on to note that, in Whirlpool's eyes, the Korean appliance makers have come to dominate the U.S. market through "unfair trade." I understand why Whirlpool's not happy about the Korean government's (alleged) subsidies to Korean firms, but why - in moral terms - is this a concern of the U.S. government? After all, if the Korean government - with the help of Korean taxpayers (who, like the wife and kids in my story above, deserve to be angry parties here) - wishes to provide cheap appliances to American consumers, why should Uncle Sam intervene? 

Put more accurately, the Joong Ang story would thus read: "The U.S. Commerce Department has announced that it will force U.S. consumers to pay more for Samsung and LG washing machines. Those consumers will now have less money available to save or spend elsewhere."

In the interest of consistency, I hope that the U.S. government will not utter a peep the next time a foreign country decides to slap tariffs on cars made by General Motors.

Bottom line: when someone is willing to give you products or services cheaper than another party - and even at a loss to themselves - you ought to take it and not complain. Yes, the folks who'd like to charge you more for these items will throw a tantrum, but they have no more right to your wallet than does any random pickpocket. 

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