Start of Talks: Free Trade Accord Should Be Based on Popular Support
7 March 2006
The first preliminary meeting for a free trade agreement between Korea and the United States Monday marks the onset of the FTA process. Although there is opposition from farmers, film industry representatives and college professors, it no longer seems a matter of whether, but how. It is time not to argue over gains and losses from the free trade pact but to work out ways and means to maximize the former and minimize the latter. This is the moment for fixing plans of operations.
But haste makes waste. Officials say there will be five main rounds of negotiations between June and December to seal the deal by next March. It took three years for Korea to conclude an FTA with Chile, so why is the bargaining period with a much larger and far more important partner barely one year, even including the preparatory period? Moreover, the Korean negotiating team of about 60 officials is only half as big as their U.S. counterparts.
Nor does Seoul appear as prepared strategically as Washington. A recent report that the U.S. Trade Representative sent to Congress included a U.S. order sheet on Korea, a very wide-ranging and sometimes far-fetched one at that. For example, it aims to protect American investors here as stipulated by U.S. law, making it hard for Korean firms to effectively ward off their hostile takeover bids, while also eliminating all export subsidies for agricultural products. What are Seoul’s countermeasures?
President Roh has set two goals for his remaining two years in office: the Korea-U.S. FTA and easing economic polarization. Considering the widening wealth gap resulting from a globalizing economy, the two objectives are more conflicting than they are complementary. The opening of the medical market, for instance, will provide world-class services for the very rich, but may put even general treatments out of reach for the poor. The rosy picture Roh paints requires a lot of time and very skillful bargaining.
He may be right to say that specific interest groups should not scuttle the FTA. But it will be a different story if a majority of people feel something is going wrong. The government needs to disclose as many details of the negotiations as possible and reflect public opinions. Seoul should also not take a weak-kneed approach in its haste to wrap up a deal. That Korea has accepted all four U.S. preconditions - screen quota, beef, cars and medicines - only reconfirms such concerns.
An FTA is not a goal but a tool. Haste and secrecy are two taboos, and only selective - not rash - market opening can help the nation’s interests Roh should not repeat the mistake of former President Kim Young-sam, whose premature economic liberalization led to an unprecedented crisis.