S Korea’s political volatility to affect FTA passage : US report
Yonhap News, Seoul
S. Korea’s political volatility to affect FTA passage : U.S.report
6 May 2007
WASHINGTON, May 6 (Yonhap) — Upcoming presidential and parliamentary elections in South Korea cast uncertainties about the ratification of a free trade agreement (FTA) with the United States despite encouraging poll results in recent days, a U.S. congressional report said.
The U.S. appears to have compromised on the issue of the Kaesong industrial complex, an inter-Korean economic project, by allowing room for future negotiations, but the FTA gives the U.S. control in making decisions, the report also said.
Seoul and Washington on March 31 concluded the FTA negotiations, broadly addressing regulatory transparency, mechanisms to prevent trade discrimination and the removal of tariff and non-tariff barriers.
In the U.S., the Congress will have to ratify the agreement under the trade promotion authority, a temporary legislation that requires the legislature to approve or reject it without seeking amendments.
A report by the Congressional Research Service (CRS), dated April 23, pointed to recent surveys in South Korea that suggest the country’s parliament will pass the agreement. The two largest parties support the trade pact, and the exclusion of rice from market opening removed a major political stumbling block, it said.
But party identity and discipline in South Korea is weak and will become weaker in the coming months ahead of the country’s presidential elections in December, said the report that has been distributed to congressmen and their aides.
"If Korea’s past presidential elections are any guide, the coming months will see a whirlwind of defections, alliances, splits, and mergers as would-be presidents and ruling parties jockey for position," the report said.
The parliamentary elections scheduled for April next year are further "likely to exacerbate the volatility of South Korean politics this year," it said.
President Roh Moo-hyun’s low approval ratings suggest he may not be able to "deliver" the votes from his own party, said the report. "An additional factor to consider is that in the past, on some controversial matters, sizeable minorities in the (National) Assembly have delayed or prevented votes through such tactics as boycott and physically blocking the speaker from assuming the chair," it said.
On the issue of Kaesong, the report said the U.S. seems to have backed away from the principle of never applying the FTA to products made in the complex.
The Kaesong project is an ambitious pilot program meant to promote inter-Korean reconciliation and cooperation, and is a symbol of the Seoul-initiated "engagement policy" toward Pyongyang. South Korea provides the capital and North Korea supplies labor to produce price-competitive products for export.
The U.S. balks at the idea of importing products made in North Korea, which it repeatedly condemns for human rights violations and for development of weapons of mass destruction.
In a compromise, Seoul and Washington included in the FTA the establishment of a committee to consider "outward processing zones" on the Korean Peninsula, a significant achievement for the Seoul, according to the CRS report.
"At the same time, the U.S. appeared to give up little in substance in the near-to middle term," it said.
The FTA allows the U.S. to control the decision and pace of any move to grant preferential treatment to North Korea-made products, given that the legislatures of both countries need to approve decisions made by the committee, it said.
"Any perceptions of foot-dragging by the U.S. may come at a diplomatic price if future South Korean governments push for more rapid integration of North Korean industrial zones into the FTA," it said.
