TED Case Studies

Japan Korea Kimchi Dispute


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I. Identification

1. The Issue

This case is about the dispute over Korean traditional side dish, kimchi, between South Korea and Japan. Kimchi is garlicky, peppery, pungent pickled cabbage, and it may safely be said that kimchi represents Korea. However, this Korea's national dish is in danger because of Japanese copycat kimchi. Although Japan has imported huge amouns of kimchi from South Korea for the last several years, at the same time, Japanese food companies have begun to make Japanese-style kimchi as kimchi has been getting popularity in Japan. Furthermore, Japan is expanding its share of the world kimchi market: today, the amount of Japanese kimchi export excesses that of Korean kimchi export. As a result, South Korea asked the World Health Organization and the Food and Agriculture Organization's Codex Alimentarius commission to establish an international standard of "kimchi" while Japan claimed that Korea has no monopoly on kimch. The Codex standard for kimchi is still under the condition of draft, the Codex committee will adopt the Korean recipe as the international standard for kimchi in July 2001.

2. Description

The kimchi dispute broke out in 1996 when Japan proposed designating Japanese kimchi, "kimuchi" (Japanese pronunciation), as an official Atlanta Olympic food (The Independent: October 9, 2000). At the same time, Korea was annoyed by Japan's rapid increase of the amount of "imitated" kimchi export. Korea questioned that there was no international appropriate standard to inspect and evaluate the quality of imported kimchi. In other words, Korea could not tolerate Japanese low quality kimchi (from Korean viewpoint) were floating around in the world market. Korea insisted on an uegent need for international kimchi standard to "protect consumers' health and to ensure fair practices in the food trade" (KFRI). As a result, South Korea brought this issue to the Codex Alimentarius that is a part of the United Nations Food and Agriculture Organization. We can see this kimchi argument between Japan and Korea from the following three angles.

First, needless to say, this is an international trade issue. It is a fact that about 80 to 90 percent of South Korea's kimchi exports have gone to Japan for the last few years, according to Korean Ministry of Agriculture and Forestry. However, during the same period, kimchi production in Japan has rapidly increased, and Japanese foodmakers have expanded their market share with Japanese-kimchi. Moreover, the Japanese copied kimchi is cheaper than Korean kimchi because of the difference of its making process. Thus, South Korea is worried about losing the big international kimchi market.

Secondly, this issue is a matter of culture as well. For the Koreans, Japanese kimchi is not genuine kimchi. It is nothing but copycat kimchi. Korean kimchi is made with Chinese cabbage, red pepper, garlic, salted fish and ginger, and then stored in clay containers to ferment for at least four weeks.(Korea Food Research Institute) However, Japanese kimchi is made with Chinese cabbage and artificial flavor, skipping the fermentation process. Kimchi is more than a food for the Koreans. It is a kind of national symbol and part of the national identity for Korea. Kimchi is Korean traditional culture itself. Korea has a saying that "the taste of kimchi is the taste of your mother's fingertips" (The Independent: October 9, 2000). Thus, to use the term "kimchi" for imitation kimchi is not acceptable for the Koreans, and even it might insult Korean culture.

Finally, we cannot forget the sad history between Korea and Japan, Japan's colonization of Korea during World War. Some Koreans do not have good feelings toward Japan and regard the kimchi dispute as another invasion by Japan. There are complex sentiments between Japan and Korea because of their history, and the kimchi issue raised new conflict between the two countries. However, kimchi is surely getting popular in Japan, and Korean culture infiltrates Japan. If the two countries resolve the problem in peace, their relationship will be better and closer in the future.

3. Related Cases

4. Author and Date: Misuzu Nakamura (May 2001)


II. Legal Clusters

5. Discourse and Status: Disagreement and in progress

This case relates to the Agreement of the Application on Sanitary and Phytosanitary Measures (SPS) of the Uruguay Round Negotiation. According to WTO, this agreement "sets out the basic rules for food safety and animal and plant health standards, and member countries are encouraged to use international standards, guidelines and recommendations where they exist." "Under the WTO foundation and its SPS agreement, the inspection criteria for the food inspection of countries have been required to harmonize with its Codex standard" (Korean Food Reseach Institute).

Along with the popularity of Kimchi in the world, Korea, the leading exporting country, began to be concerned about that its market share was threatened by Japan, since there was no international standard of Kimchi products. Although Japanese "kimuchi" - comes from Japanese pronunciation - does not follow Korean traditional making process "kimchi," Japan has increased the amount of kimchi export. As a result, in December 1995, Korea asked the World Health Organization and the Food and Agriculture Organization's Codex Alimentarius commission for establishing Codex standard for the international kimchi trade. Korea claimed that an urgent international kimchi standard was needed to secure fair trade and protect consumers' health.

Since then, Korea and Japan have discussed about the kimchi issue in the Codex sessions to set a standardized criteria of kimchi product in terms of its recipe and trade. At last, in September 2000, the 20th Session of the Codex Committee on Processed Fruits and Vegetables advanced the Draft Standard for Kimchi for final adoption. In July 2001, the Codex Alimentarius Commission will adopt the draft as the Codex Standard, and all countries which are involved in kimchi trade will comply with the rule.

According to the draft, a product, which does not meet the Codex Standard, is not labeled as kimchi. When a product meets the standard once, it should be named "kimchi." Therefore, Japan will have to change the name of its kimchi products, which satisfies the rule, from "kimuchi" to "kimchi." 95 % of the standard recipe (draft) is based on Korean original making style, and only 5% is from Japan's requests. Korea's assertion is reflected in the criteria of basic ingredients, Chinese cabbage and seasoning mixture (red pepper, garlic, etc.), and the necessity of fermented process. On the other hand, the draft also permits using artificial food additives, citric acid and xanthan gum, which is Japanese food makers' manufacturing method. The Codex Alimentarius Commission

6. Forum and Scope: WTO and Multilateral

7. Decision Breadth: Japan and Korea

8. Legal Standing: Treaty


III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: Asia

b. Geographic Site: East Asia

c. Geographic Impact: Japan

10. Sub-National Factors: No

11. Type of Habitat: Temperate


IV. Trade Clusters

12. Type of Measure: Intellectual Property

13. Direct v. Indirect Impacts: Direct

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product:

b. Indirectly Related to Product:

c. Not Related to Product:

d. Related to Process:

15. Trade Product Identification: Kimchi

16. Economic Data

17. Impact of Trade Restriction:

18. Industry Sector: Food

19. Exporters and Importers: Korea and Japan

In this case, the key importer is Japan, and the key exporters are both Japan and South Korea. Korea is the major exporting country of kimchi, since it is Korea's traditional dish. However, Japan has also been expanding its international market of kimchi while importing most of the kimchi exports from Korea.

The following data are from Korean Food Research Institute: ( KFRI)

Korean Export of Kimchi

1993 1994 1995 1996 1997 1998 1999
Value (1,000 U.S.$) 34,203 44,191 50,909 39,420 39,692 43,743 78,840
Volume (M/T) 9,313 11,090 12,476 10,786 12,069 15,939 24,561

Japanese Import of Kimchi

1993 1994 1995 1996 1997 1998 1999
Value (1,000 U.S.$) 28,739 37,726 43,301 36,662 37,648 42,236 77,038
Volume (M/T) 6,992 8,723 9,470 9,759 11,226 15,229 23,816

The amount of Korean kimchi export dramatically grew up about 1.8 times in value and about 1.6 times in quantity from 1998 to 1999. The major factor of the growth is the increase of Japanese import because it accounts for more than 95 % of the exports from Korea in 1999. Japan has imported more than 90 % of Korean kimchi since 1996; moreover, the amount is still increasing. However, despite the enormous amount of Japanese kimchi import, Japan has more expanding its worldwide kimchi market than Korea. Japan has grabbed nearly 80% of the world kimchi market (Far Eastern Economic Review: May 25, 2000).


V. Environment Clusters

20. Environmental Problem Type: Culture

21. Name, Type, and Diversity of Species NA

Name:

Type:

Diversity:

22. Resource Impact and Effect: NA

23. Urgency and Lifetime: NA

24. Substitutes:


VI. Other Factors

25. Culture:

"'What the Japanese are selling is nothing more than cabbage sprinkled with seasonings and artificial flavorings,' said Robert Kim, assistant manager for the overseas sales team at the Doosan Corporation, a South Korean food manufacturer that operates the world's largest kimchi factory" (The New York Times, February 5, 2000). He, his company, and other kimchi factories in Korea are surely affected by the wave of Japanese kimchi industry's market expansion both domestically and internationally.

Since the 1988 Seoul Olympics, when kimchi was introduced to world people, the amount of Korean kimchi export has been increasing, and kimchi has become a lucrative trade item for Korea. Especially, the popularity of kimchi in Japan is amazing; more than 90% of Korea's kimchi exports have gone to Japan the last 4 years. However, along the popularity, Japanese foodmakers have begun to make Japanese-style kimchi and eroded the kimchi market that was once operated by Korean kimchi industry. Today, only 10% of kimchi consumed in Japan is imported from Korea; the rest is produced in Japan. 80% of the world kimchi market is occupied by Japan.

One of the main factors of the success of Japanese kimchi makers is their low-cost production process unlike Korean way. Japanese makers skip the fermentation process and add artificial flavoring instead of natural one. This method is cheaper and less time consuming; thus, they can provide low-priced kimchi and win the competition with Korean counterparts. Furthermore, Japanese kimchi is made to suit Japanese taste, which is less spicy and pungent than Korean one, and foreigners tend to prefer this Japanese mild kimchi.

Such Japanese copycat kimchi has stirred up Korean patriotic sentiment, since kimchi is more than food and a kind of national symbol for Korea. For Koreans, to make kimchi with non-traditional way and call it "kimchi" mean to insult Korean culture. The above-mentioned Robert Kim said,"This debate is not only just protecting out market share. We are trying to preserve our national heritage" (The New York Times, February 5, 2000).

Korea has a complex attitude toward this kimchi dispute. Although majority opinion is to oppose Japanese kimchi to protect Korean culture, it is a fact that some Koreans are pleased at the amazing popularity of kimchi in Japan. Both opinions are closely related to the unforgettable historical fact of Japan and Korea that Japan colonized Korea for 35 years.

Japan's increasing share of the world kimchi market has reminded Korea of the past Japan's invasion. Despite the fact that Japanese way of making kimchi does not follow Korean traditional style, Japan's imitation products are floating around the world as "kimchi." For Koreans, this is not only Japan's market domination but also insult of national pride as they experienced before. "Asked if South Korea's effort to restrict Japan's use of the word kimchi reflected lingering animosity over Japan's colonial rule of Korea, Mr. Fukuda said, 'Though I do not belong to the generation that ruled Korea, there could be some remaining sentiments'" (The New York Times, February 5, 2000).

On the other hand, there is the opinion that the recent Japan's penchant for kimchi will be a bridge between two cultures. Japan and Korea have not willingly exchanged their cultures because of the sad history; however, this kimchi issue would be a good chance for Japan to have interest in Korean traditions and cultures. This will be the beginning of establishing a good relationship between Korea and Japan. Furthermore, some Koreans view that Japan's expansion of kimchi trade helps the globalization of kimchi, Korean national food, namely, the worldwide awareness of Korean culture.

With regard to Japanese attitude, they are claiming that they also have the right to use the term "kimchi." Japan insists that Korea has no monopoly on kimchi, as Mexico and India do not have the privileges of "tacos" or "curry." "Japanese kimchi makers contend that once Korea Food Research Instituteethnic dishes gain international popularity, they are usually altered to fit the local palate" (The New York Times, February 5, 2000).

26. Trans-Boundary Issues: No

27. Rights: Yes

28. Relevant Literature

Web-sites

Korea Food Research Institute

Codex Alimentarius Commission

Korean Kimchi Story

Life in Korea, Cultural Spotlight



1/2001