SEOUL, DEC. 29 -- The Reagan administration, which avoided high-profile disputes during South Korea's volatile election campaign, is starting to move forcefully to remedy the growing trade imbalance, according to U.S. and South Korean officials.
In a signal that the hiatus from overt trade pressure is ending, U.S. officials are pressing hard for South Korea to ease barriers to beef and cigarette imports as well as to lift some limits on American insurance firms in Seoul. Deputy Prime Minister Chung In Yong, in a bid to head off potential U.S. retaliatory moves, plans to make a hastily arranged trip to Washington next week to present a compromise package being worked out in Seoul.
"A principle of reciprocity" will be needed in dealing with South Korea's snowballing surplus with the United States, Trade and Industry Minister Rha Woong-Bae told a meeting of senior ministry officials today. He called for a "positive response" to growing U.S. pressure.
Trade officials say the bilateral talks on the beef, cigarette and insurance issues were intensified after the Dec. 16 presidential election, won by ruling party candidate Roh Tae Woo.
Until then, according to a wide range of diplomatic sources, the United States had pursued a relatively soft-spoken trade policy in South Korea, largely because of fears that aggressive moves would draw untimely attention to the close and occasionally controversial political relationship between Washington and Seoul.
Even though South Korea has been politically calm since the presidential election, there are indications that the United States remains somewhat cautious, mindful that followup elections for the National Assembly will be held in February or April. The U.S. official downplayed local news reports that Washington has set an early January deadline for South Korean action on the disputed issues, although he said sanctions could be imposed if the problems fail to be remedied quickly.
The specific issues under negotiation represent the tip of an economic iceberg that Washington appears intent on chipping away at in 1988. South Korea -- one of Asia's four "economic tigers" -- is expecting to register a record surplus of nearly $10 billion dollars on its 1987 trade with the United States, up about 25 percent from 1986.
That comes during a year in which the U.S. economy suffered a sharp setback in its trade deficit, while South Korea's export-driven economy rolled up an estimated growth rate of 12.2 percent -- the highest in the world, according to officials here.
Provisional figures indicate that South Korea, largely due to soaring exports, moved ahead of Britain in 1987 to become the fifth-largest U.S. trade partner in terms of the dollar value of two-way trade.
Like Japan, South Korea has been sending a stream of new cars and electronic goods to the United States, although its own market remains relatively closed to American exporters. But while the Japanese trade gap showed some signs of improving in 1987 -- partly because of the rapid appreciation of the yen -- South Korean's worsened, partly because of South Korea's refusal to let its currency, the won, appreciate rapidly. This is likely to be a major source of bilateral trade tension in 1988.
South Korean trade officials entertain few illusions about the U.S. pressure around the corner. "There will be increased tension in trade relations," said Kim Chul Su, assistant minister in the Ministry of Trade and Industry. "U.S. economic problems being what they are, we must accept the fact that the U.S. will be more aggressive." On the question of won appreciation, he added, "I think the pressure will be quite considerable."
It's far from clear whether the United States will be able to accomplish as much as it hopes to. Although senior technocrats such as Kim appear to recognize the imbalances and are willing to see them adjusted, strong political lobbies in South Korea may stand in the way of the fundamental adjustments Washington is requesting. Many government and business officials fear that some domestic industries could be devastated by a sudden influx of U.S. goods and competition from U.S. firms.
In the case of beef imports, for example, Kim indicated that the powerful Agriculture, Forestry and Fisheries Ministry opposes the U.S. request. Currently, imports of foreign beef are banned, and the United States is reportedly asking that, as a first step, luxury hotels be allowed to import beef for their largely foreign clientele. Talk of this concession has prompted strong protests from South Korea's National Livestock Cooperatives Federation, which decided at a weekend meeting to wage a national campaign against the proposed move.
"The beef imports may of course cause panic among farmers," Rha said in a year-end statement today. "However, if we do not comply with the request, the results might be a heavier loss to the nation's economy as a whole by inviting harsh retaliatory measures, including import restraints on Korean auto and electronics products."
Aside from the imposition of retaliatory tariffs, South Korean officials are worried about losing special treatment that grants lower U.S. tariff levels to imported goods from developing countries. U.S. officials here say the lower tariffs for South Korea and the other economic tigers -- Taiwan, Hong Kong and Singapore -- are under review because of the rapid economic progress in those countries.
South Korea argues that its economy, although robust, is still somewhat fragile -- 1987, officials here note, is only the second year that the country registered a current-account surplus. But underneath the economic arguments also lies a warning: Officials here contend that by twisting Seoul's arm in a bid to gain economic concessions, the United States could spark anti-Americanism in this proud and bullish nation, where nationalism is rising.
"There are countries whose relations cannot be measured only by a short-term economic yardstick," argued an editorial in The Korea Herald, a local newspaper. "Korean-American ties certainly belong to that category."