Korea Times, Seoul
Impatient Free Traders
Not When but How to Implement Accord Matters
1 November 2008
It is natural that the government shifts its focus from the financial sector to the real economy in dealing with the ongoing crisis.
If such efforts should include the hasty ratification of a bilateral free trade deal with the United States, however, the Lee Myung-bak administration may have taken the wrong target ― once again.
The ruling Grand National Party says the early implementation of the Korea-U.S. Free Trade Agreement, or KORUS FTA, would serve as a breakthrough in tiding over the current economic turmoil by preempting the world's biggest export market.
Such a premise itself is subject to heated debate, as international trade is a two-way game, and not just rival political parties but economists are split over the pros and cons of unfettered trade with America, by far the largest and one of the strongest economies on this globe.
Even more worrisome is the governing camp's naive perception in pushing ahead with its parliamentary passage as well as the lack of supplementary steps to help reduce damages to the industries hit hardest by the scheduled market opening, such as agriculture and most service sectors. All this comes in stark contrast to the approaches of their counterparts across the Pacific.
Government officials say the unilateral ratification of the KORUS FTA at the National Assembly would put pressure on the U.S. Congress to do likewise, an assumption doubted even by many governing party officials, in view of the difference not just in negotiating power but in bargaining styles of the two sides.
Whoever emerges victorious in Tuesday's U.S. presidential elections, the Democrat-controlled Congress would not ratify the deal without revising it to the greater interests of U.S. industries, including auto workers and rice farmers. Sen. Barack Obama, the likely winner, has made clear the final beneficiaries should be U.S. workers and consumers, not large corporations. For U.S. Democrats, a free trade deal is less about international friction of interest than conflicts between big businesses' profits and individuals' welfare.
Opinions could hardly be more different here, where officials say an increase in exports would automatically lead to workers' increased income. As we have seen, however, it would be some chaebol-affiliated manufacturers that will enjoy the biggest windfall profits from the lowered tariff barriers, while situations would remain largely the same ― if not worse ― for many other sectors of the industry.
Seoul says once the deal is ratified, the government would come up with relief measures for the hard-hit farmers. Even elementary schoolchildren no longer believe this, after watching the rice subsidy scandals in which about one fifth of the one million recipients of the agricultural financial support were city dwellers, including 40,000 government employees and state company officials.
Even if an FTA is a win-win game, the government should close any loopholes in the deal. If the accord proves to have an unbalanced benefit-loss structure, Seoul should be ready to revisit it, as Washington will likely do.
The government should seek not just free trade but fair trade for various sectors of society.
