Now that its election is over, South Korea no longer will escape American pressure over what is seen here as protectionist practices while its trade surplus with the United States is growing, U.S. Trade Representative Clayton K. Yeutter said yesterday.
"There's a large accumulation of trade disputes with Korea" that have not been tackled, Yeutter said.
His comments during a breakfast meeting with reporters was the first indication the Reagan administration has followed a policy in recent months of pulling its punches in disputes with South Korea to help that country's return to democratic rule with its first genuine election in 16 years.
Yeutter also revealed that the Reagan administration is considering a broad attack on the duty-free privileges of a number of newly industrialized countries (NICs), including the so-called "four tigers" of the Pacific Rim -- Hong Kong, Singapore, South Korea and Taiwan.
The U.S. trade deficit with the four for the first 10 months of this year is greater than America's deficit with Western Europe.
Yeutter said the United States is considering graduating all four Pacific Rim NICs from the generalized system of preferences (GSP) that allows duty-free entry to the United States for some products from less developed countries. Graduation from GSP is handled on a product-by-product basis.
"My judgment, which is shared by a number of my colleagues, is that we should go beyond that and evaluate when a country should be graduated from GSP," he said. This should occur, he added, when a broad range of a country's products are competitive in the United States and when nations reach a certain stage of development.
U.S. electronics companies that import components duty-free from the Asian NICs have mounted a campaign against graduation.
In addition, the Reagan administration is putting pressure on all four Asian NICs to allow their currencies to rise in relation to the dollar. While their currencies have appreciated somewhat, in general they have not gone up as much as other major U.S. trading partners, making products from the Pacific Rim NICs less expensive and thereby more competitive in the United States.
With the price difference, Japanese companies have opened production facilities in those countries to make goods for sale in the United States. As a result, those countries' trade surpluses with the United States have grown.
Government figures released last week showed the United States was running a $32.6 billion trade surplus with the four Asian NICs for the first 10 months of this year. That is an increase of $7.4 billion, or about 30 percent, from the same period last year. By way of contrast, Western Europe's trade surplus with the United States decreased by $1.5 billion, to $25.1 billion, and Japan's grew by $2.2 billion, to $50.2 billion.
But the administration's main focus among the Asian NICs appears to be South Korea. Asked at the end of the meeting how much longer South Korea's honeymoon would last, Yeutter replied, "Not much longer."
"It's not because we want to create problems for the new government," he continued, "but because we can't afford to shelter them."
He said he gets more letters complaining about South Korea's trade practices than any other country.
But Yeutter said South Korea has failed to live up to market opening commitments in at least one instance -- an agreement to allow U.S. insurance companies to do business in that country. He said South Korea "still remains essentially closed" for sales of tobacco and maintains barriers blocking imports of beef.
South Korean officials, though, said that despite its trade successes their nation is still poor, with a per capita income of about $2,500 a year, and that it needs a trade surplus to pay its debts to western lending institutions.