Over the same period, the market share of Chinese products in the U.S. rose from 13.38 percent to 16.46 percent. The market share of Indian products rose from 1.06 percent to 1.23 percent, Brazilian products from 0.81 percent to 1.31 percent and Vietnamese products from 0.36 percent to 0.54 percent. The so-called late comers or developing countries have increased their power by utilizing their price competitiveness.

What's interesting is the fact that products exported by eight economies that have signed free trade agreements with Washington, including Mexico, Singapore and Chile, saw their U.S. market share rise 0.75 percentage points from 2005 to 2007, while the share of Korean products fell 0.19 percentage points over the same period. This illustrates the fact that an FTA greatly aids in the recovery of price competitiveness. This is why we must waste no time in ratifying the Korea-U.S. FTA, which is awaiting approval by our National Assembly.

But the FTA alone will not solve the problem. Even if Korean products enjoy tariff-free status through the FTA, it is impossible for our products to compete on price with Chinese, Indian, Brazilian or Vietnamese exports. If the Korean economy is to make a living off exports, it must compete on quality and technology rather than price.

Germany has posted a trade surplus every year for more than 50 years since the mid-1950s. Unlike Japan, Germany has yet to become embroiled in a major trade dispute with other countries. That's because Germany's key exports have not been consumer products targeting end users, but key materials and components that go into such products. With its world-leading competitiveness in basic industries such as chemicals, machinery and components, Germany has been making sizable trade surpluses without stirring up opposition. The way for Korea's economy to survive is to make qualitative improvements by changing its line-up of export products.