FTA-inflicted farm households to get subsidy
Korea Times | 30 March 2007
FTA-Inflicted Farm Households to Get Subsidy
By Yoon Ja-young
Staff Reporter
The Korean government is moving to soothe the anger of farmers and others who will be affected by a free trade agreement (FTA) with the United States by committing a package of measures aimed at supporting them.
But the aid plan might burden taxpayers and slow the restructuring of uncompetitive industries, many economists warned.
The Ministry of Finance and Economy yesterday said in a report to the National Assembly that it is preparing measures to provide as much support as it can to the workers and industries victimized by the FTA.
While most people agree that the FTA would be a plus to the overall economy, there certainly are winners and losers. Agriculture and several other industries have opposed the deal, as they will inevitably be damaged by the powerful competitors from the United States. The Korea Institute for International Economic Policy (KIEP) had estimated that the FTA would incur around 800 billion won in losses for farmers.
``The government has been considering measures to support domestic sectors that are expected to be damaged,’’ the ministry said.
It reported that it would use the unemployment insurance fund to help workers find new jobs or relocate them to other industries. About 10 billion won has been earmarked for the fund this year.
Farmers and fishermen will also get subsidies or be allowed to close down their businesses. The government is considering subsidizing farming households in the event prices fall due to the FTA, as happened following the Korea-Chile deal.
The government is also mulling over measures to promote the competitiveness of these affected sectors. Specifically, it is considering consulting services and loans for manufacturing and service sectors.
The comprehensive support package, however, could be initiated only after the conclusion of the FTA talks. The government plans to announce concrete government measures on April 2 after the two countries reach an agreement on the pact.
