$1 million needed to offset FTA damages: ministry
The Hankyoreh | 2 January 2007
$1 million needed to offset FTA damages: ministry
Estimates: 100,000 jobs lost and 13,000 companies restructured
Free trade agreements (FTA) with the United States, Japan, China, and the Association of South East Asian Nations (ASEAN) will put pressure on more than 13,000 companies to restructure and put over 100,000 Koreans out of work in the next 10 years, according to the government. These figures represent the first set of government data on the effects that FTAs will have on the nation’s economy.
The Ministry of Commerce, Industry and Energy (MOCIE) requested a budget of 1 billion won (US$1 million) to the National Assembly on January 1, saying that it needed extra funds to offset the harsher effects of FTAs, estimating 13,000 firms and 100,000 workers would be affected. The ministry based its request on calculations made after consulting a report submitted by professor Jeong In-gyo of Inha University in November 2005.
In the report, Jeong warned that over 70,000 people working at about 9,550 firms would be negatively affected by an FTA with Japan, more than 40,000 workers at 3,980 companies would feel the brunt of such a deal with China, and about 25,000 workers in 3,670 companies would face difficulty should South Korea sign a trade deal with the U.S. The ministry’s extrapolated estimate should all three FTAs go through is that 13,340 companies and 103,696 workers would be affected.
The MOCIE said, "Extra budgeting will be needed to minimize the aftermath of the FTAs and to secure a support base for the policies following implementation of the FTAs." Except for directly compensating companies and workers for their losses, the ministry said, "we will make use of the FTAs as opportunities to increase the nation’s industrial structure through the restructuring of marginal industries," added the ministry.
In response, professor Jeong explained, "Over 100,000 Koreans may lose their jobs, but a rearrangement of human resources will occur, as well, and more than 100,000 jobs are expected to be created by the FTA with the United States. As a result, more people will be employed on the whole."
