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Korea-US FTA remains contentious

Korea Herald

Korea-U.S. FTA remains contentious

By Lee Sun-young

25 April 2006

Opinions were sharply divided at the National Assembly yesterday during a debate over the risks and benefits of a free trade agreement with the United States.

The session, organized by a group of lawmakers, comes as some politicians, including those from the ruling camp, and civic groups here criticize the government for a ’hasty approach’ to the trade deal that will have a tremendous impact on Korea’s economy and society.

Seoul and Washington are aiming to conclude their FTA negotiations by March 2007 and for the agreement to be ratified by their respective parliaments by June that year. The two sides are set to hold the inaugural round of FTA talks on June 5 in the U.S. capital.

Yesterday’s session drew keen attention from political and business circles as the panel included top governmental figures, academics, and experts on the issue, including Korea’s chief negotiator for the FTA talks Kim Jong-hoon and former presidential aide on economic policies Jung Tae-in who has now become the foremost attacker against the government’s push for the free trade pact. Lee Kyung-tae, president of the Korea Institute for International Economic Policy who was asked to analyze the economic effects of the proposed economic arrangement, defended the government’s drive for the trade pact.

"The Korean economy needs a new engine for further growth and a FTA with the United States can serve to acheive that aim."

He said the deal could increase two-way trade from $73 billion to an estimated $90 billion. Over the next five years, U.S. exports to Korea could rise by 54 percent and Korea’s gross domestic product could increase by as much as 2 percent.

Another proponent Lee Hee-beom, chairman of the Korea International Trade Association, expressed concern that the ongoing controversy over the Korea-U.S. FTA is excessive.

"There is no country in the world that has achieved economic success through a closed-door policy. It is not an option but a necessity for survival in a capitalistic world," he stressed.

However, opponents fought back hard.

Lee Hae-young, international relations professor of Hanshin University in Seoul, questioned the touted economic benefits of the deal.

"Although there are some economic benefits that Korea will gain from the FTA, they are likely to be exclusively shared by four major conglomerates and as a result the economic and social rift between the rich and the poor will widen," he claimed.

The professor urged the government to exercise greater caution, saying "The United States is likely to push for a more comprehensive and higher-level trade deal than any FTAs the Korean government has signed so far. A hasty approach would bring disastrous side-effects upon us."