Korea-US FTA and rush to neoliberalism
Korean Alliance against KorUS FTA | 6 September 2006
Korea-US FTA and Rush-To neoliberalism
Cho, Hee-yeon
(Director of the ‘Institute for Democracy and Social Movement’,
Sungkonghoe University)
1. Foreword - Watching the ‘rush-to neoliberalism’.
Korean society has plunged into the whirl of pro- and anti-FTA arguments since the surprise announcement by the chief negotiator and Trade Minister Kim Hyun-chong of the opening of Korea-US FTA talks during the joint press conference with the US Trade Representative at 5:30 AM, February 3rd. The FTA to be closed between Korea and the US which was made public in such a hasty fashion has set many people thinking that economic liberalization should be the way to go. In the following 5 months, however, Korean citizens has become more aware and critical of the untransparent and dashed process and the predictable outcome that could be as devastating as the 1997 financial crisis. The Korean government is forging ahead with the policy that will have severe impact on people’s livelihood without going through a due process of consultation with the blunt-bearing sectors of Korean society. It is pushing forward a policy that could bring out even worse socioeconomic polarization without counter-measures in the same picture, obviously seized up by the group of pro-US technocrats who see only a short-term profit out of the problematic Korea-US FTA.
Taking the term of "rush-to modernization" labelled on the general Park Jung-hee’s exportation-driven modernization policy during the 60s and 70s, I’d like to call the full-frontal liberalizing policy being presently pushed ahead by the Participatory Government a "rush-to liberalization". The ’rush-to modernization’ was implemented top-down, during an extremely repressive regime. The ongoing ’rush-to liberalization’ is being driven by a democratic government that has resorted to bureaucratic expediency and secrecy expelling visible collecting efforts of public consensus.
This essay mainly will identify what is problematic in the negotiation process, its structural import and a negative legacy to be left us from now onwards.
2. The negotiation process so far and the buoyed questions.
Throughout the first round of talks early last June, the joint agreement settled on 11 out of 15 sectors, except for the 4 most contentious points which are agriculture, SPS, textile, trade remedy. As many have feared, the negotiating initiative was on the US side, whereas Korea was brushed aside on such sensitive issues as the rules of origin for the products made in the Gaesung Industrial Complex, tariff concessions on textile·garment and early tariff elimination, abuse protection against levy of anti-dumping·countervailing duties, etc.
The problems spotted during the first meeting as important issues of contention will be tossed to the second round.
A closed negotiation process off public consensus
We can trace some of the most visible problems arising from the ongoing negotiations as followed. Firstly, the Korea-US FTA negotiation is being conducted behind the closed doors. The Korean government is not opening the process to the public, it is not making efforts to generate public consensus. In secret sessions the pro-US cabinet members and officials convinced the President of the necessities of the Korea-US FTA and the President has convinced himself into bulldozing it through all obstacles. The ongoing FTA talks are being called by Korean civil society “the 2nd Japanese annexation of Korea”, meaning that Korean civil society takes it a matter of grave concerns, particularly with regard to the socioeconomic transformation that Korean society will be put under upon its implementation. The Korean government, however, is rushing to the negotiation without the due process of public hearings, feedback, or consensus-building.
From worse to worst, the Korean government is pushing the process under a mutual agreement of silence. The US and Korea have agreed that they will release the final joint agreement to the public immediately after completion, but they will not reveal any other documents generated during the negotiation process for the next three years.
Secondly, the ’four items of prior settlement(allowing operation of profit-making medical institutions, resuming importation of U.S. beef, easing automobile emission rules on car imports and relaxation of the screen quota mandatory showing days allocated to Korean films)’ have been conceded to the US as token of sincerity from the Korean side before the 2nd round of official FTA meeting. The Korean government proved to have yielded its right as a sovereign country to the U.S. Trade Representative’s pressure to surrender to its demands on maximizing the interests of the US industries.
Thirdly, the government is pushing obsessively for this Korea-US FTA without giving it a full and thorough examination or proper public consultations regarding the predictable(negative as well as positive) outcome. Late is better than never. It’s time the Roh administration start conducting an assessment of the FTA effects on livelihood of Korean people and free the process up to a nationwide debate.
Fourthly, food sovereignty is the most important part of our integral national sovereignty and the Korean government is about to discard it.
Fifthly, the Korean negotiating team during the first round of talks has already yielded on many controversial institution-related items presented by the US which will be a serious threat to Korean economy. Among them are the US investor vs. the Korean state claim, the forbidden clause on the ’enforcement of performance requirements’, etc.
Sixthly, given that the IMF crisis in 1997 was incurred largely by the wrong policy over financial market opening, the Korean FTA delegation has been intent on hurriedly acceding to the US requests for financial market and services opening. Once the agreement is sealed, Korean financial market will suffer an unprecedented instability due to the maximized financial market opening.
Seventhly, over a host of issues to be exerting influence on national industries and livelihood, the US government is pushing through their national interests ahead while the Korean counterpart is willing to agree on whatever they extend. For example, the US has refused to take what is produced in the Gaesong Industrial Complex as Korean products.
3. On the nature of the ’rush-to liberalization’ in the era of neoliberal globalization.
In this section I’d like to take stock of the factors generating this phenomenon of ’rush-to liberalization’ and some of its obtrusive structural attributes.
Firstly, I think that beneath the ’rush-to liberalization’ attitude lies a strong pro-US conscious and dependence. That undercurrent is being viewed as the reason why so many Koreans, bureaucracy or citizenry, turn blind eyes to the impending disastrous outcome of the FTA pushed at a neoliberal basis.
Secondly, the modernization upheld by the general Park Jung-hee’s regime during the 60s and 70s also falls into the category of ’liberalization’. In this context some might call the ongoing FTA process a ’2nd liberalization’. But there is a big difference, in structural conditions and nature, between the speedy liberalization of the 60s and 70s and of today. First of all, in the past although there was a scheduling for ’opening of exportation’ within the export-oriented economy, there also was a checking mechanism over the procedures for ’opening importation’. During this period Korea practised a sufficient protectionist policy for domestic market as well as a strong export-centered policy. Secondly, because at that time the Korean economy was of only a fledgling size, the US pressure toward opening the market was relatively weak and the politico-military considerations had ascendancy over economic ones. To the US, Korea was not so much a scrambling spot for economic gains as a ’show-case’ in the East Asian region under the harsh grip of Cold War confrontations. Thirdly, during this period there was a sizable amount of economic expansion accompanied by a detectable increase in employment and in ’benefits’ turned to the SMEs which were side by side with big corporations within a hierarchical, exploitative mechanism. At the early stage of the absolute economic expansion, there could be formed a sharing mechanism of distributing the growth effects despite the innate harms(structural exploitation) it breeds.
The problem is what is taking place now is completely different in terms of the structure. Unlike in the 60s and 70s, there are high probability of destruction as results from the ongoing rush-to liberalization. Firstly, we are facing a full-frontal pressure for the opening in the Korea-US FTA without a checking mechanism embedded within economy. Secondly, the US is no longer looking at Korea simply in a politico-military relationship. It looks at Korea as an opportunity for maximizing its economic interests. Thirdly, the outcome of the opening will fall into no scrutiny or circulating mechanism, which is one of the biggest problems of the neoliberal opening. Even if there could be some positive outcome(like increase in some of the highly competitive sectors as the government contends) raked up in the opening, there will be no fruit-sharing mechanism. As results, even if there be a successful implementing process, economic polarization will only be worsened.
Thirdly, the paradoxical phase of today’s reality is that the so-called ’democratic government’ became a driving power for the rush-to opening.
As a matter of fact, there are two separate trends in ’democratization’, political and economic liberations. Political liberation means that the state control is weakened, which will expand politico-social space. Economic liberation is about market and capital autonomy, increasing it freed from the authoritarian state, its grip on the market and dirigist economy management. This liberation of economy is proceeded, in the world system and under strong influence by neoliberal globalization, in a marketist fashion to the utmost. We can say what we face at this point is a “refraction and repression of democracy in the neoliberal globalization process".
This process in Korea has been widening and deepening through the past democratically elected Kim Youngsam, Kim Daejung and the present Roh Moohyun governments, although each is tinged with different political trends. In other words, the reform became double-edged in the way that even though there is no structural wrench as in an authoritarian regime, the reformative intent of ’economic liberalization’, bearing neoliberal effects, is carried out in the form of ’rush-to opening’. The ’democratic government’ in this process turns into a driving force for the neoliberal type of economic liberalization, rather than the old-time grip over a warped system. The reform shifts to a rationale behind the enhancement of global competitiveness and neoliberal liberalization to squeeze it out. It means that the present democratic government, the fruit of the June People’s Uprising of 1987, is the one that drives its own reformative momentum weaker, confining economic reform(handed from the Uprising as future assignment) to neoliberal restructuring and squandering prospects toward social democracy, radicalism, democratic socialism, etc. This explains the paradox that the Roh government, the legitimate heir to the Uprising, turns up into the leading agent of neoliberal reform in the Korea-US FTA.
4. Prospects for a different FTA model.
We should think of a different path to social development than through the current Korea-US FTA model, when we are under this paradoxical circumstance where the democratic government becomes a staunch imposer of neoliberal reform. We can think of it at various levels in terms of nature of economic regime(anti-capitalist, for example) or of ongoing Korea-US FTA negotiation process. Unlike during the early 90s when the neoliberal globalization was overwhelming on almost every front and the ’TINA(There is no alternatives)’ syndrome was prevalent, we are now entering a new cognitive stage where a ’TATA(There are thousands of alternatives)’ is slowly taking precedence.
Regarding the second level, first of all we should give weight to the fact that the US-driven FTA is not a universal model or general trend but a single case out of dozens of FTAs currently in effect. The US has concluded so far 9 FTAs with 15 countries, which means that the American-style neoliberal globalization is not the general trend since it accounts for only 5% of all 186 RTAs worldwide. The problem is the Korea-US FTA is a ’comprehensive FTA’ that represents especially the US interests to the much fuller degree than the 9 other FTAs concluded by the US. We should look at this Korea-US FTA model at a relative point of view.
Among many FTA models implemented by the US, Europe, and developing country models, the Korea-US FTA turns out to be an ’FTA at the highest level’, even among the US models, in terms of pressure for opening the widest range of areas and sectors. When the US is the top strongest economic performer in the world, i) there will be formed a hierarchy of considerable degree, a disastrous factor among different economies, ii) the range of opening is so wide that there are great chances that the movement of US-centered transnational capital encroach and gain control over the counterpart economy, iii) the system will work in a way that public policing of the counterpart country is hampered while the individual investors’s rights are protected ahead of everything else.
This level of severeness extricable from the Korea-US FTA leads to the gloomy outlook that once it is implemented, particularly in Korea, one of the outstanding a pro-US countries in the East Asia region, it will end up in a market-fundamentalist, extremely exploitative FTA regulation under which millions of people will suffer. We should believe that there can be an alternative and that we can take, instead of the present neoliberal type of FTA, a different model that guarantees the least set of rights of people and ensures the livelihood conditions while the borders get crumbled. For example we should think of a social, public type of trade and economic cooperation model, labor and environment friendly, which excludes such commodities as electricity, water and gas services, etc., from the liberal trade items.
Looking for an alternative model tantamount to looking for(and making real) a model which guarantees people’s ’rights’ against ’liberty’ and ’autonomy’ of transnational capital. The anti-FTA struggle lies in ensuring people’s rights while the US-driven FTAs such as the NAFTA or Korea-US FTA, in representing transborder liberty of capital.
5. The strategy corresponding to the struggle against the Korea-US FTA and the challenge of realigning the front.
I defined above that the drive for the Korea-US FTA is a form of ’rush-to opening’ driven forward by a democratic government, which epitomizes the paradoxical situation in which a democratic government becomes the driving force for codifying neoliberalism. How has this condition changed that of the social movement? What should be the strategic orientation in confronting the new situation?
First of all, this paradoxical situation of neoliberalization incarnated in a democratically-elected government is not exclusively appearing in Korea. Democratic developments in transitional countries in East Asia such as Singapore, Thailand, the Chen Shui-bian administration of Taiwan, etc., are also through the course. The course demonstrates some difference from the Latin American one. The problem is this ’paradoxical side’ in the course works like a deterrent to a transformation of the resultant public stress into a radicalized resistance. It has an appendant disciplinary effect that cracks down on political resistance. In case of Korea, liberalizing policy implemented by the Kim Dae-jung’s People’s Government and the successive Participatory Government has resulted in ever-widening social polarization. But the process has tied the damaged livelihood to an inaction where no radicalized resistance could be singled out. The struggle against the Korea-US FTA at present should overcome this disconnectedness.
Secondly what we witness today in this process of ’neoliberalization of a democratic government’ is that the faultline is being drawn within the reformative force itself, between the neoliberal camp and the social liberal camp+people’s movement. Since the June Uprising of 1987 the line was thought to be inbetween the pro-reform and anti-reform. Now in the paradox above mentioned, there comes up a new front, neoliberal marketism and oepning vs. realization of public benefits. Up to this front there is going on an intensive war between a force pushing forward a riderless expansion of capital flow and marketism and a force for holding a rein on this freehand capital and market order in the name of public good.
This war to me can be defined as a strife for democracy in its general term in the era of neoliberalism. This struggle can have even a larger social footing than the one in the past liberal era. The foundation of the social movement has grown in proportion with the neoliberal attacks against the social, throughout the labor struggle in the 20th century. With that in mind, the neoliberal discourse of globalization -such as ’global competitiveness’- should distinctively be placed against the core message of counter-neoliberalism which is on protection of the public. We can call the struggle for the public in the era of neoliberal globalization, in this sense, a struggle for democracy in its general term at a global level which passes in a concentric circle through all different kinds of national pro-democracy struggles worldwide. The center must be the fact that the struggles describe themselves as anti-neoliberal capitalism which is anti-people.
The struggle to implement policies optimizing public interests, unlike the past one for democratic reform, has a transnational dimension attributed to it since the stumbling factors come from transnationalism behind neoliberal globalization.
In the anti-FTA movement we should remind ourselves that this issue is not so much national as global. What is realized nationally is a specific representation of the global process. With regard to this, we should enable ourselves to reach out for solidarity to the other Asian countries such as Thailand, Malaysia, etc., undergoing similar American-style FTA negotiations. It is more than probable that the US will make the case of Korea a paragon of all the other FTAs they should push through to Asia. If Korea concludes the FTA with a particular Asian country in the future, we should be able to fight in solidarity with the people of the counterpart country so that the outcome becomes not so atrocious as that from the NAFTA.
