mad about... mad cow

I have been monitoring the situation rather closely on the Korea -U.S. Free Trade Agreement. It seems to me that people need to learn more about economics and the benefits of free trade. Under the free trade agreement, both sides stand to benefit (except for maybe the U.S. auto industry), but Koreans seem to be hell-bent against this deal. Most of them cite the fact that under a free trade agreement, Korean beef imports from the U.S. would resume in full tilt since 2003, when a case of mad cow disease in the U.S. made the Korean government halt all U.S. beef imports. As of the time of this posting, the U.S. has agreed with Korean demands that U.S. beef exports to Korea be restricted to cattle under 30 months of age, and that certain parts such as the brain and the spine be voluntarily excluded.

The question is: Is mad cow disease that big of a deal? If we are to believe what wikipedia reports, there have been 3 cases of BSE (a.k.a. "mad cow disease") in the United States. In a country with a population of over 300 million people, that seems to be quite a low number and a low risk factor. Granted that the way that cattle is examined in the U.S. is in need of improvement, but I think that the mad cow disease fears in Korea seem to be way overblown to say the least. If we think of it strictly from a statistical perspective, the 3 cases in a population of 300 million equates to 1 case per 100 million people. That means that you're more likely to die driving your car than by contracting mad cow disease from a hamburger. This goes to show you that the "fear" in Korea must be a byproduct of political attacks on new president Lee Myung Bak rather than scientific and statistical facts.

A BIGGER PROBLEM THAN MAD COW DISEASE?

What I find even more appalling is that while the Korean public and media are fixated on reporting sensational stories of the dangers of mad cow disease, no one is saying anything about the number one cause of deaths in Korea. According to this research study, lung cancer is the leading cause of death in Korea. We also have been told time and time again that consumption of tobacco based products, particularly cigarettes and cigars, are the prominent culprits when someone suffers from lung diseases and cancer. According to the World Health Organization, smokers in Korea were comprised of 55.3% of males and 5.7% of females of age 15 and over in the entire population (you can find those statistics here.). As of 2004, Korea had a 40% tariff on foreign cigarettes.

It seems that cigarette smoking has flown completely under the radar in the argument for or against this free trade agreement. Under a free trade agreement with the United States, Korea would be required to import cigarettes from the U.S. with no such tariff barriers, effectively lowering the domestic price of U.S. cigarettes that will be sold in Korea. This is not good news from a public health standpoint. South Korea is currently the eighth largest cigarette market in the world, and foreign cigarettes control 25% of the Korean market under the current structure with tariffs (You can find those statistics here.). Can you imagine what lower priced and higher quality cigarettes coming from the world's most efficient cigarette producer would do to the smoking epidemic in Korea? By removing tariffs and lowering the market clearing price of cigarettes, it is a safe assumption that the Korean smoking epidemic will only increase. In recent years, Korea's smoking rate has dropped thanks to an aggressive anti-smoking campaign and improved health care conditions that were instituted by the government. As an economist though, I point out again that this doesn't come free. There is no such thing as a free lunch, and the economic burden of smoking on Korean society is rather heavy, as pointed out by this research study done by Yonsei University researchers. If public health is such an issue as the Korean media and opposition party members claim, then they should be focusing on cigarettes rather than beef. Then again, if we are to believe the alarming statistic that over half the men of adult age in Korea are smokers, they probably applaud lower priced cigarettes so that they can smoke them all the more (Another issue that I am not mentioning is that under this free trade agreement, U.S. exports of alcoholic beverages such as beer, wines and liquors will also flood Korean markets at a much lower price than currently available. Once again, I assume that they applaud such a move because Koreans enjoy the "pleasures" that U.S. goods such as cigarettes and alcohol provide to the typical male Korean consumer with a considerable amount of disposable income).

In sum, the mad cow fears seem to be overly exaggerated, and fueled by Lee Myung Bak's opposition parties that are out to drag him down at all costs. The South Korean media also seems to urge this activity, as it makes for a good news story when thousands of people line the streets with candlelights in hand and protest against the government. You will get no argument from me in favor for a free trade agreement. As an economist, I believe that free trade properly done can benefit all those who are involved (If you don't believe me, we need to talk. I can suggest some good reading material and discussion points why this is so). I also urge people who have a gripe about free trade to realize that free trade is FREE trade. This means that there is a CHOICE involved. If mad cow disease stemming from U.S. beef is indeed such a concern, Koreans have a right to NOT PURCHASE any of it at their local supermarket. The choice and the power is theirs as consumers. Likewise, if they would like to smoke, the choice is theirs to do so as well. All I am saying is that if public health is such a great concern as these opposition party leaders would like the public to believe, then they should kick the habit and argue for a smoke-free Korea rather than tell you what you can or can't eat.