Shipping firms on China trade on red alert with another garlic dispute

The "garlic dispute" that caused tension between Korea and China trade last year in the wake of rising emergency customs, is making shipping and trade companies nervous again. Last year, an unexpected garlic dispute led to reductions in major trade items such as petrochemical products and cellular phones, causing difficulties for shipping firms in this trade.

The battle started again with pressure from China to not import cellular phones and polyethylene (PE), based on poor imports of Chinese garlic into Korea.

In the mean time, the Ministry of Commerce, Industry and Energy (MOCIE) asked communications and petrochemical companies to import Chinese garlic. The government had difficulty in restoring harmony due to a large gap between concerned departments and industries, even though it pushed to use farm product price stabilization funds, and divide the import costs between cellular phone and PE exporters.

The garlic dispute with China began when Korean government raised emergency tariffs on Chinese garlic to 315 percent, conscious of farm votes before a general election last year. As China protested to Korea, banning cellular phones and petrochemical product imports, the Korean government promised China that it would import 32,000 tons of garlic in an attempt to reconcile the situation. However, Korean companies were not able to import garlic because China raised garlic prices.