The Korea-US FTA and fragile economic sovereignty
The Hankyoreh | 26 May 2007
[Editorial] The Korea-U.S. FTA and fragile economic sovereignty
The actual document that is slated to be ratified as the free trade agreement between South Korea and the United States has been made public. As expected, there were quite a few sections the public never knew about that would be disadvantageous for Korea. The government had made quite something out of the Committee on Trade Remedies and the Committee on Outward Processing Zones that would be part of the agreement, but it turns out both are far from what one had been led to expect. In the meantime, the United States built for itself specific channels to allow itself to intervene in domestic policy through various permanent committees. It makes you wonder if Korea has handed over all that was to be gained from the agreement as well as its economic sovereignty, all for being overly obsessed with getting an agreement in place as an end in itself.
Looking at the actual document, you are as disappointed as can be about the areas the government had said were its major achievements. A typical example would be the composition of the Committee on Trade Remedies. Its role would be the leisurely tasks of facilitating cooperation between agencies, exchanging information, developing educational programs, and dealing with anti-dumping and countervailing duties.
The same goes for the Committee on Outward Processing Zones. As it stands, it would be hard for products made at the joint Korean Gaeseong Industrial Park in the North to be recognized as South Korean made, since there are tricky conditions involved, including "progress in the denuclearization of the Korean peninsula, that it influences inter-Korean relations, and that labor and environmental conditions there are up to international standards." It is hard to rid oneself of the impression that a committee thus named was added just to make things look good.
Parts of the document that reflect American demands, on the other hand, are very specific, and aspects of these sections hurt Korean sovereignty. The document would allow for an excessive level of American intervention in the area of textiles. Korea would be required to supply the U.S. with the names and contact information of Korean textile and clothing manufacturers, and well as the names of company executives, the exact type of production machinery used, the identity of pre-processing materials suppliers, and the name and contact information of their customers in the U.S. U.S. would be able to make sudden visits to Korean companies. When it comes to automobiles, the Korean executive branch seems to have decided it can ignore the National Assembly and decide the rate of special consumption and provincial tax to that would be applied, and at its own discretion. Korea is going to allow imports of beef with bone chips and even GMOs (genetically modified organisms). The U.S., on the other hand, has for itself a means for continually exercising trade pressure because of the establishment of a standing committee on inspection and quarantine. Even just on paper, it looks as if Korea just about handed over half of its right to decide national policy on pharmaceuticals and inspection and quarantine over to the Americans.
There should be no need to describe all over again how the agreement as negotiated has Korea giving much more than it is coming away with. Korean agricultural and pharmaceutical industries are going to be defenseless and exposed because of market openings, and could get blown out of the water. If the U.S. interferes in one policy-making issue after another on top of that, the Korean government will have even less room with which to maneuver. That is what it looks like happened with talks between the two countries about beef imports and GMOs. You worry that Korea has handed over most of what was supposed to be gained in all this and even lost the ability to say it has sovereignty over its economy.
Naturally, it will take a close analysis of the roughly 1,400 page document to make an informed judgment. That being the case, the full disclosure of the complete agreement means the country can begin to really inspect it for what it is. The National Assembly, trade experts, and representatives of industries and sectors with an interest in what might happen need to give it a thorough look-over. The question of how well the agreement serves the national interest and whether the country would gain in tangible economic terms need to be given the first standard of evaluation. Also of great importance is whether Korea will be able to assert its sovereignty over economic matters in the course of policy-making or when there are trade disputes. Free trade agreements are not something about which to have quixotic dreams, as American trade pressure will no doubt become more intense if the agreement takes effect.
