South Korean Opposition Builds Against US Trade Pact
Tensions between South Korea's major parties are ramping up over a free trade pact with the US, shortly after the trade deal's long-delayed ratification on the US side.
On 12 October the US Congress approved three free trade agreements (FTAs) with South Korea, Colombia, and Panama that had been the subject of nearly five years of back-and-forth political wrangling between US political parties (see Bridges Weekly, 12 October 2011). US President Barack Obama signed the three pacts into law on 21 October.
With attention moving away from the US political process on these trade deals, the focus has now turned to the ratification process in South Korea, the largest of the pacts.
The US-Korea FTA, which was negotiated under the previous Korean President Roh Moo-hyun and his counterpart, then-US President George W. Bush, has proven tough for Korea's ruling conservative Grand National Party (GNP) to push through the assembly.
Current Korean President Lee Myung Bak and the GNP have moved their unofficial deadline for ratification from the end of October to early November, in hopes that such a date would allow for the trade pact to come into force by 1 January 2012.
However, the main congressional opposition - the Democratic Party (DP) - has expressed concerns over how this FTA could affect farmers and small business owners. To address these issues, DP legislators have proposed a "ten plus two" renegotiation, which would revise ten items in the deal, as well as add two extra measures intended to minimise the impact on domestic workers.
Without a new renegotiation, Kim Jin-Pyo, the DP floor leader, told officials and legislators that his party will resort to blocking tactics if the GNP attempts to push the bill through without DP support.
The GNP has a substantial majority in the legislature, granting them the option to pass bills without DP backing; however, the GNP has avoided doing so, presumably given the upcoming general parliamentary and presidential elections that are scheduled for next April.
Civil society, industry opposition grows
Further placing pressure on the Korean legislature is the resurgence of anti-FTA protests in the capital city, Seoul. Event organisers of recent Occupy Seoul rallies mentioned the pact as one source of concern, arguing that only the top one percent of Korean society would benefit from this FTA.
Large rallies were also held in 2007, immediately following the initial signing of the deal.
The Korean agriculture and livestock industries are especially worried of an influx of cheaper imports. Estimates from the US International Trade Commission suggest that US agricultural exports, once the pact is fully implemented, could increase by anywhere between US$1.9 billion to US$3.8 billion.
Meanwhile, Korean automobile, electronics and chemicals exporters are expected to benefit greatly from the increased trade surplus expected from the accord, according to a statement from the Korean Ministry of Strategy and Finance. Estimates cited by the Ministry find that the pact will generate 350,000 new South Korean jobs.
The trade pact underwent a partial renegotiation in 2010 to resolve the two countries' differences over US access to the Korean beef and automobile market, and Korean access to the US automobile market (see Bridges Weekly, 9 December 2010). These changes, the opposition DP argues, have tipped the scales in the US' favour and will require further trade talks prior to Korean ratification.
Lee Sung Kwon, chief economist at Shinhan Investment Corp. in Seoul, told Bloomberg that nations must expect to make gains in some areas and losses in others when dealing with FTAs: "there's no way any country can have benefits only."
ICTSD reporting; "South Korean opposition resists US trade pact," AFP, 13 October 2011; "South Korea's Lee Urges People to Support Free-Trade Agreement with US," BLOOMBERG, 30 October 2011; "DP opposes swift passage of KORUS FTA," KOREA TIMES, 17 October 2011; "Second ‘Occupy' protests held in Seoul," KOREA TIMES, 23 October 2011; "South Korea to miss self-imposed deadline on US trade pact," REUTERS, 28 October 2011.