U.S.-Korea FTA Talks Unlikely to Succeed
Korea Times
U.S.-Korea FTA Talks Unlikely to Succeed
By Tom Pauken
21 June 2006
The United States is the world’s largest economy while South Korea ranks tenth. The two countries started negotiations for a bilateral free trade agreement (FTA) in Washington D.C. June 5-10. Some experts predict U.S. exports to Korea could increase by 60 percent while Korean exports to the U.S. could jump 20 percent. The U.S. International Trade Commission claimed the U.S. would add $20 billion annualized growth to its economy while Korea would gain $10 billion. Other advantages could stem from an FTA accord.
President Roh Moo-hyun of South Korea gave three reasons for his nation to support the FTA. Korea’s credit rating would improve. Korea’s competitor China would not receive the same trading privileges. The country’s crumbling alliance with the U.S. would change for the better.
U.S. Ambassador to Korea Alexander Vershbow expressed optimism speaking to the Korea Importers Association in Seoul on June 2. He described the FTA as, one of the most important developments in U.S.-Korea relations in the 52 years since the signing of our Mutual Defense Treaty.''
Nevertheless, critics from America and Korea have fears. American business groups complain South Korea will continue to burden them with excessive regulations and unfair taxes. A prominent American labor union AFL-CIO called for a,moratorium on the FTA talks so that the governments can create a labor friendly model of trade and cooperation.’’
The AFL-CIO raises a valid point because South Korea wants products from the Kaesong Industrial complex in North Korea to be tariff-free. Large corporations run those factories and pay a North Korean factory worker only $2 a day. North Koreans can’t go on strike. This violates International Labor Organizations conventions 87 and 98, which require all workers to have the freedom to associate and organize.
The U.S. car industry remains skeptical. Charles Uthus, vice president of Automotive Trade Policy Council in Washington D.C. said, Before we start rewarding the Koreans with increased market access, we need to be sure to open that market for U.S. exports.'' In 2005, Korea imported 31,000 foreign-made cars but exported 730,000 cars to the U.S.
Associate U.S. Trade Representative Wendy Cutler explained her frustration with the South Korean Ministry of Health and Welfare. On May 3, they announced plans to exclude reimbursements for many foreign-made pharmaceuticals to benefit cheaper Korean-made generic drugs. She noted that drugs from the U.S., Europe and Japan are more expensive because of high research costs and innovative treatments.
U.S. farmers demand an end to tariffs on all agricultural products, citing South Korea's import quotas and 40 percent tariffs.
In response, South Korean farmers declared American agricultural products will flood the market, lowering the values of their goods. Korean rice is expensive compared to that in other countries, and they want to keep it that way. Most protestors against the FTA are farmers.
Some farmers clashed with riot police. Some collected bags of rice and burned them. They felt demonstrating against the FTA was more important than protecting their property. Some protestors feigned poverty but found sufficient means to pay visa fees and a round-trip plane ticket as well as one week accommodations in Washington D.C so they could join anti-FTA demonstrations during the first round of the FTA negotiations.
They lay in the middle of streets, shouted loudly and played traditional Korean music. On June 7 they took the creative approach of walking from the U.S. Capitol to the White House, taking three steps, bowing to the ground and chanting,Down with the FTA.’’ Police and motorists grew frustrated because they caused traffic jams.
The FTA talks might fail with or without the help of South Korean protestors. At the end of the first round of talks both sides couldn’t agree on 60 percent of the issues. They negotiate by making stiff demands and take an inflexible approach. In all likelihood, they will grow so frustrated with each other that no accord will be reached.
Nonetheless, many South Koreans including government officials take an antagonistic approach to the U.S. The FTA talks may provide an opportunity for useful sabotage. Pres. Roh Moo-hyun (frequent critic of the U.S.) could abandon the FTA by claiming America imposed harsh conditions on Korea. He could then turn up the anti-American rhetoric before the upcoming presidential elections. He can’t run for re-election but he will want an ally to succeed him.
This scenario might prove a false but never underestimate the anti-American sentiments of the government.
The writer teaches writing in Songnam, Kyonggi Province
