S Korea-US FTA talks boil down to rice and ’kimchi’
The Nation, Bangkok
S Korea-US FTA talks boil down to rice and ’kimchi’
By Suthichai Yoon
29 March 2007
SEOUL - I walked down to Seoul Plaza last Sunday in front of city hall, hoping that some of the estimated 7,500 protesters there could give me a glimpse of what Thailand can learn from South Korea when it comes to dealing with Washington on a free-trade agreement (FTA).
In the end, it was all about rice and kimchi.
An angry anti-FTA academic told me: "The Americans are simply using rice as a negotiating chip." Often cited as a "deal-breaker" because of its political sensitivity, rice has just emerged as a potentially explosive issue. It is expected to be brought up for the first time in the 10 months of negotiations. Seoul has insisted all along that this staple food item should be excluded from the proposed FTA.
The US has recently demanded that Korea fully open its rice market although the two countries had agreed earlier not to highlight the issue prior to starting talks in June, 2006. South Korean negotiators have argued that Seoul is obliged under a multilateral World Trade Organisation (WTO) clause to abolish tariffs on rice from the US, Thailand, China and Australia gradually through 2014. However, it’s not allowed to offer greater benefits to only one of these countries. South Korea agreed in the 2004 WTO pact to increase rice imports from the current 4-per cent to 8-per cent of consumption after 10 years.
A member of the opposition Democratic Labour Party said: "The government is betraying the people if it decides to go along with Washington on the FTA. We must conduct the talks like kimchi, our world-renowned dish: spicy, salty and stinky."
But a senior executive of a large "chaebol" - South Korean business conglomerate - intoned: "We only stand to gain if we sign the FTA with Washington. I don’t know why our politicians are trying to block such an important move. It’s a very dangerous game."
While the Thai-US FTA talks are stalled pending the next election, this weekend will see the crucial make-or-break round for South Korea-US negotiations on the same controversial issue.
"It’s a choice between a long-awaited breakthrough agreement or a thunderous breakdown before March 31," explained a senior government official close to the talks.
July 1 is the deadline for the Bush administration’s trade promotion authority. The White House has "fast-track" powers, which accords it the right to negotiate trade deals that Congress can either approve or reject - but for which it is not authorised to make amendments.
The US Congress, in turn, needs at least 90 days to review the agreement, hence the anxiety over the March 31 deadline for the talks. The Korean side headed by Trade Minister Kim Hyun-chong and the American delegation led by Deputy US Trade Representative Karan K Bhatia, both hold law degrees from Columbia University.
Democrats, who won control of Congress in last November’s elections, want all FTAs to include an enforceable commitment to abide by international labour standards. These include freedom of association, freedom to bargain collectively, freedom from child labour, freedom from forced or compulsory labour and freedom from workplace discrimination.
The key sticking points boil down to this: the US wants wider access to Korea’s beef, rice, automobile, and pharmaceutical markets, while Seoul demands that Washington fully open up its market to textiles and ease its anti-dumping duties. Hyundai Research Institute, a well-known think tank in South Korea, has just released a study underscoring two possible negative effects that might arise if the FTA were to be signed: widening income disparities between the rich and the poor and concerns over the country suffering from poor US economic conditions. That perception runs diametrically counter to President Roh Moo-hyun’s government’s claim all along that the pact will narrow the income gap by creating more jobs. There is a general agreement among knowledgeable observers however that while automobiles, steel and textiles will enjoy a greater volume of exports once the tariffs come down, there is a great risk that a large number of small and mid-sized service-oriented enterprises may be driven out of the market. That means workers will be deprived of their job security - another politically sensitive issue that has stalled the talks on the South Korean side so far.
Over a bowl of delicious Korean glutinous rice and spicy kimchi, the discussion in Seoul this past weekend turned to getting to "yes" at the last minute. It all boils down to negotiation tactics.
What if the American side raises the rice issue at this very critical juncture? Finance Minister Kwon O-kyu took that in his stride. "That would be merely a bargaining tactic. The United States has nothing much to gain regarding rice. They must have raised it as a bargaining chip."
Against the deafening protesting voices in front of city hall in downtown Seoul in the background, the minister declared: "If the United States uses brinkmanship tactics, so will we."
