The Hankyoreh, Seoul
Editorial: Korea should not ratify FTA
30 June 2007
Korea and the United States have finalized the free trade agreement (FTA) between them and officially sign the actual document today. Given its social and economic influence and the problems the FTA will present, issues that have become apparent in the course of the release of the initial draft after it was first finalized in April, and then in the course of the renegotiations, Korea stands to lose more than it will gain. We urge the National Assembly not to ratify the agreement.
To begin with, it is hard to expect any real economic benefits from this agreement. The government says the country can expect an increase in trade, investment and productivity. Initially the FTA was supposed to be about making Korea a developmentally advanced country through increased productivity, but the likelihood of that happening came and went long ago. It is little more than a fantasy to say that there is going to be more investment - unless there are clear advantages, like inexpensive labor. Korea, nevertheless, has put almost its entire agricultural market on the table, with the exception of rice. It does not stop there. Korea has conceded on far too many things, including beef, the screen quota, genetically-modified organisms, intellectual property rights and data exclusivity. The Korean people cannot endure having to pay so much for just one thing: an increase in trade volume.
The second problem is that throughout the whole process these were unequal negotiations, in which Korea was dragged around by the U.S. The Korean government hurriedly accepted American demands, starting with its four major preconditions and, at the very end, finally accepted renegotiations. In the meantime, there was never an adequate attempt to figure out how the agreement would influence the country or to see what the Korean public thought. The negotiations began without a national consensus, and even when the negotiations were over, all the country was shown was a hastily produced report sponsored by some state-funded think tanks. This is the reason one cannot easily accept the agreement. You can see the problem with how, while the U.S. resolutely refused to agree to amend its own laws, Korea will have to revise dozens of its laws if the FTA is ratified.
Finally, we cannot agree with misled government thinking that believes that growth is the only way to go. We are entering an era when per capital national income is US$20,000. As the government itself has recognized, ‘‘Vision 2030,'' a national strategy that seeks to resolve problems of employment, wealth distribution and poverty through growth, has already reached its limit. Despite that, this FTA is no further developed than the conglomerate-centered growth strategies of the 70s. It is almost exclusively export conglomerates that will enjoy the actual benefits. Mid-sized companies, which rely on domestic consumption for more than 80 percent of their sales, will have even less to work with. These smaller companies employ 10 million people. This FTA will not solve the biggest issues facing our society: growth without jobs and socioeconomic disparity. It will only exacerbate these problems.
The FTA will not be the ‘‘second opening of Korea,'' following the country's first opening to the western world in 1876, that its supporters talk about. The financial sector and other areas were already opened up considerably after the 1997 Asian financial crisis. The reason Korea remains only on the threshold of being a fully-developed nation is not because it has not opened up enough, but because it has yet to reform its outdated economic system. Let us get rid of a mindset that says quantitative growth can resolve both distribution and disparity. We will not stand among the ranks of advanced nations unless we build strong our mid-sized companies and foster domestic consumption. We urge the National Assembly to made a cool-headed decision.
