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large Korean market size. And then, Korean auto makers’ competitiveness was increased to the extent that Korean exported cars threatened advanced countries’. Also, with the inauguration of Clinton, the U. S. trade policy became aggressive. So, Korean government, in 1994, voluntarily took some steps to open market but the U. S. kept intensifying trade pressure by listing Korea as Area of Concern in the same year. In 1995, Korean government additionally took measures including revising of tax system to enlarge the chances to import cars with the form of Memorandum of Understanding. Even after these steps, the U. S. pressure for additional market opening continued. In 1997, the USTR listed Korea as PFCP using Trade Act Super 301. Taking consideration that Korean economy is under depression, the U. S. reached an agreement with Korea on October 20, 1998. Table 4: XHistoric Overview of the Korea-U. S. Auto Trade Policy | The U. S. calls on Korea to open market will go on as long as the auto trade imbalance between two countries goes on. Moreover, if Korea exports more cars to the U. S. escaping out of current economic crisis, the U. S. will probably intensify pressure on Korea and demand for the fair relationship of component suppliers, auto makers, and car dealers, more purchase of American auto components, and deregulation in component market for A/S just like the U. S. demanded on Japan. Therefore, it is needed to seek fundamental measures to cope with American trade policy. Comments for Fundamental Measures 1. Obtaining the Fairness in Market CompetitionFirst of all, it is desirable to obtain the fairness in market competition. As shown in the case of Japan, the U. S. will intensify and diversify its pressure into on social aspects including transparency and fairness in the relationship of auto makers, component suppliers, and car dealers and domestic progressive tax system in order to enlarge American car and component export to Korea. Therefore, obtaining transparency and fairness can root out the source of American complaints. The transparency and fairness will be helpful for Korean auto industry also because they will be a basic condition for superior business to grow better and to meet the coming global standard age. 2. Mature Control of NegotiationThe U. S. demanded bilateral negotiation mainly complaining that Korea imports too small number of autos while it exports large number of autos. However, this assertion of the U. S. to have trade balance in auto industry seems unreasonable. According to the most trade theories, trade occurs and benefits both sides usually by producing and exporting a good in which each has better productivity resulting from abundance in resources, or labor productivity, or economies of scale. So we need to persuade the U. S. into the fact that the trade is almost impossible if the trade balance in certain industry has to be obtained between two countries. The U. S. is also overemphasizing the trade surplus of Korea in auto industry. In terms of over-all trade, Korea is experiencing trade deficit with the U. S. Especially in agricultural products, machinery, and chemical goods, Korean trade deficit is enormous. Also, Korea suffered deficit of $ ?????????? in component market in 1998 even though it recorded trade surplus in complete car market. And it must be considered that Korean autos are mostly classified into lower small ones, thus Korean car’s price (average: $ 10,000) amounts to only the half of American car’s (average: $ 20,000). Consequently Korea’s market share in American auto industry was assumed to be only 1% in terms of dollar not in terms of unit. So, it is needed for Korea to reply to American request with reasonable explanation and to confidently cope with American pressure. 3. Improvement of Competitiveness of Korean Auto VehicleFor the long-term strategy, strengthening competitiveness of Korean cars will be the most fundamental measure for long-term development and handling American pressure. Generally speaking, competitiveness can be achieved by strategic cooperation between car makers, cooperative labour-management relations, enhancing R & D, and diversification of strategy according to products. Especially, large car market that will be affected most, needs more attention. It is also reasonable to work for superior competitiveness in small and middle-sized car in which Korean auto makers might be able to be more competitive. 4. Diversification of Export MarketGoing actively into other markets can be an alternative. Korea has heavily depended on export solely to the U. S. If we turn our interest into growing market such as Eastern Europe, South East Asia, and South America where small and middle-sized cars take large portion of auto market, Korean low small cars might be able to have more competitiveness. Some regions especially in Asia are under economic crisis and there will be more trade barriers. However, it is surely reasonable for Korea to diversify its export market, marketing, and design according to local demands for the after-crisis. With diversification of export market, Korea can more confidently cope with negotiations with the U. S. 5. Long Effort to Understand U.S. trade politics and policyKorea, that has quite near sighted policy making mechanism, tends to ignore the long term research and investment to overcome the conflicts with U.S. Along with the previous short and middle term measures, Korea needs to design its policy direction with the long term perspective. CONCLUSION In summary, the results were not that satisfying as most newspapers reported. Korea could escape out of the American retaliation and the measures boosted Korean market with reduction in consumer car price. However, those steps are expected to have several side-effects also and there will be surely continuous conflicts between two countries. The negotiation results that is believed to be somewhat tentative measures, leave us to think further