Korean Lawmakers Ratify US FTA
In a surprise plenary session of the South Korean National Assembly on Tuesday 22 November, the ruling Grand National Party (GNP) pushed through the ratification of the US-Korea Free Trade Agreement, despite chaos in the assembly room and protests on the streets. The controversial trade pact, originally negotiated in 2007, was signed into law in Washington this past October (see Bridges Weekly, 12 October 2011).
US Trade Representative Ron Kirk, praised the approval of the "win-win agreement," which could potentially go into effect on 1 January 2012. "We look forward to working closely with the government of Korea to bring the agreement into force as soon as possible," Kirk added.
Upon the pact's ratification in Seoul, the president's spokesman, Choe Guem-nak, stressed that the pact would lead to job creation and a rejuvenated economy, and promised that "the government will actively pursue measures for farmers and smaller business owners to help improve their competitiveness."
Korean attitudes toward the FTA have long been mixed, with the GNP facing substantial political opposition from the Democratic Party (DP) and outcry from small business owners.
With the vote originally postponed to a plenary session scheduled for 24 November (see Bridges Weekly, 16 November 2011), the GNP-initiated session on Tuesday came as a surprise to the DP. Chaos broke out in the National Assembly as the GNP used their majority power to push the FTA through, inciting strong disapproval from the DP and leading to the detonation of a tear gas canister by opposition lawmaker Kim Sun-dong.
Kim told reporters that the tear gas was meant to act as a reminder for the GNP of the "bitter tears" that the ordinary citizen would cry if the trade accord were to go into effect.
Investor-state clause still spurring controversy
The DP has lately taken issue with an investor-state clause in the trade pact's chapter on foreign investments, which allows either party to bypass domestic courts and refer investor-state disputes to an international arbitration panel.
Critics argue that this provision would give US investors undue right to sue the Korean government; proponents note that the clause has already appeared in past Korean FTAs and has yet to lead to Seoul being sued.
Last week, President Lee Myung-bak, in hopes of speeding up the accord's ratification, promised opposition members that once ratified, he could approach the US with that particular provision of the FTA and request its renegotiation.
The DP has since refused to accept that offer.
The pact was already partially re-negotiated once in 2010, for the sake of resolving disagreements between the two countries regarding Korean access to the US automobile market and US access to the Korean beef and automobile markets (see Bridges Weekly, 9 December 2010).
Concerns over cheaper agriculture imports
Opponents of the trade pact argue that the FTA will solely benefit large export companies, while pushing small businesses and farmers to the wayside. These sentiments were echoed in past protests (see Bridges Weekly, 2 November 2011) as well as on Tuesday in the streets of Seoul, where protesters marched and reportedly chanted threats to retaliate at the polls next April.
Sohn Hak-kyu, chairman of the DP, called the ratification process an "act of violence," stating that if the voters gave the DP power, "we will declare the agreement invalid."
Observers following the Korean ratification process had suggested that the upcoming general parliamentary and presidential elections were the reason why the GNP had previously been reluctant to use their majority power to push the bill through.
The Korean agriculture and livestock industries have taken a particularly strong stance against the pact, fearing the possibility of cheaper agricultural imports from the US.
Estimates from the US International Trade Commission suggest that US agricultural exports would increase by anywhere between US$1.9 billion to $US3.8 billion as a result of the trade agreement. The deal is set to slash tariffs on nearly two-thirds of US farm exports.
The original accord was negotiated and signed under former Korean President Roh Moo-hyun and his counterpart, then-US President George W. Bush, in 2007. The US Congress ratified the pact last month, after a summer filled with political wrangling over a controversial worker aid programme.
The accord was signed into law shortly after by current US President Barack Obama.
ICTSD reporting; "US-South Korea Free-Trade Deal Ratified in Seoul Amid Protest," BLOOMBERG, 23 November 2011; "South Korea Approves Free Trade Pact with US," NEW YORK TIMES, 22 November 2011; "South Korea Clears US Trade Deal," WALL STREET JOURNAL, 23 November 2011.