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US may seek FTA renegotiations on labor, environment

The Hankyoreh, Seoul

U.S. may seek FTA renegotiations on labor, environment

According to U.S. media reports, new labor standards will bring Korea-U.S. trade deal

12 May 2007

Washington plans to demand renegotiations on several areas of the Korea-U.S. free trade agreement (FTA) signed on April 2, according to U.S. media reports.

Should the U.S. ask for a reworking of the trade deal’s terms on areas touching upon labor and the environment, experts predict controversy to erupt in South Korea.

Seoul has repeatedly denied that there will be any further negotiations on the FTA.

On May 10, the U.S. Congress reached an agreement with the administration of U.S. President George W. Bush on trade policy, specifically regarding new standards encompassing labor and the environment in all bilateral trade deals.

Accordingly, the United States will renegotiate FTAs it has recently signed with countries such as Panama, Peru, South Korea, and Colombia, according to the U.S. press. These FTAs have been signed but still face approval from U.S. Congress, the reason they still may face revision due to the May 10 policy addendum.

Regarding the new standards adopted by U.S. Congress on May 10, in an interview the same day with Agence France-Presse, Max Baucus, chairman of the U.S. Senate Committee on Finance, said that recent FTAs with four nations including South Korea should contain the five core standards set forth by the International Labor Organization (ILO); namely, the right to organize, the right to bargain collectively, and bans on child labor, forced labor, and employment discrimination.

Korea and the U.S. did not ratify collective bargaining rights and freedom of association when they inked the trade deal on April 2. Summarily, after the May 10 legislative session, some members of U.S. Congress have expressed the ‘need to take a hard look’ at the Korea-U.S. FTA.

Seven environment-related international treaties, such as the CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) and the Montreal Protocol on Substances that Deplete the Ozone Layer, also are covered by the new standards adopted by U.S. Congress on May 10.

Regarding the effect of the new Congressional regulations on the Korea-U.S. FTA, there will likely be significant changes in provisions in connection with labor, according to experts in Korea.

Song Hong-seok, an official of the Labor Ministry, said, "South Korea has not approved four of the [ILO] provisions - the right to organize and to bargain collectively, and two terms regarding a ban on forced labor. If the U.S. steps up its demands on such matters, Korea will both have to change labor-related parts of the FTA and revise the nation’s labor laws."

If the FTA is indeed renegotiated per U.S. Congress’ new terms, items which sparked controversy prior to the FTA’s ratification will have to be revisited, which could touch off more protests against the trade deal.

Meanwhile, the government has maintained it will be steadfast in opposing any renegotiation of the FTA.

While meeting U.S. Ambassador to Korea Alexander Vershbow on May 11, Trade Minister Kim Hyun-jong said, "There will be no renegotiations. Under any circumstances, the current agreement must be maintained."

Lee Hye-min, South Korea’s deputy chief negotiator in FTA talks with the U.S., said, "As Washington hasn’t made official moves yet [regarding any renegotiation proposal], it is difficult for Seoul to express its view on this issue. We are currently trying to confirm whether [the U.S. demands] the ILO key standards to be stated in the agreement and to be ratified," added Lee.

The U.S. Congress and administration on May 10 also agreed to limit contracts with suppliers who do not meet the ILO’s five basic labor standards in the area of government procurement, a process that refers to a foreign company being hired on a state-sponsored contract. This area also falls within the Korea-U.S. FTA.