South Korea and the United States Signs Controversial Free-Trade Agreement
4 July 2007 7:00 pm

South Korea and the United States recently signed the controversial Korea-United States Free Trade Agreement (KORUS FTA) where tariffs on nearly 95 per cent of trade in consumer and industrial products will be phased out within three years. However, not only does KORUS FTA face strong opposition from small farmers and trade unionists from both countries, but it may also face the possibility of not being ratified, especially by the Democrat-control Congress in the US.

On Saturday, 30 June 2007, South Korea and the United States signed the controversial Korea-United States Free Trade Agreement (KORUS FTA) that aims to increase the trade and investment flows between the two countries in sectors including agriculture, industrial and consumer products, financial services and automobiles. Korea’s sensitive rice tariffs were excluded from liberalisation.

Though the agreement was praised by President George W. Bush, who claimed that it enhances the “strong United-States-Korea partnership, which has served as a force for stability and prosperity in Asia”¹, it drew strong opposition from small farmers and trade unionists from South Korea as well as from the U.S who are concerned about, inter alia, the exploitation of cheap labour and the loss of jobs. In South Korea, on Friday, 29 June, around 50,000 people protested against the signing of KORUS FTA in major cities including Seoul, Cheonju and Gwangju. Protestors in Seoul were also dispersed by police forces with water cannon². On the same day, 110,000 members of the 150,000-strong Korean Metal Workers’ Union (KMWU), South Korea’s largest union which represents workers from companies such as Hyundai Motor, ³ stopped production lines all over the country in opposition of KORUS-FTA.

Several organizations like the Korean Alliance Against the Korus FTA (KoA) and the Korean Americans Against War and Neoliberalism (KAWAN) have expressed concerns that KORUS FTA will put the Korean people’s health at risk. The agreement contains provisions that put profit before people’s rights, for example, by imposing longer patents for pharmaceuticals, which will increase their price. According to one joint statement issued by several medical organisations protesting against KORUS FTA last year, the agreement promotes privatisation of essential services such as health care, education, water and electricity. As a result, it would restrict access to basic rights, such as right to medicine. The medical organisations said in a statement: “We believe that everyone has the right to health service such as prevention, treatment and rehabilitation based on one’s needs. Commercialisation of health service and privatisation of public health facilities restrict people’s access to proper healthcare”.

However, KORUS FTA still needs to be ratified by the legislatures from both countries, and its approval remains uncertain. In the United States, Democrat-controlled Congress has claimed it will vote against the treaty because of their concerns over the loss of US jobs and the view that it would make the US market less competitive. Other major concerns are over the automobile provisions, which the Democrats claim opened the U.S. to more South Korean cars but failed to dismantle the non-tariff barriers in South Korea⁴.

KORUS FTA, the U.S.’ second largest bilateral or regional trade agreement since the 1993 North America Free Trade Agreement (NAFTA), was signed by U.S. Trade Representative Susan C. Schwab and South Korean Trade Minister Kim Hyun-chong. This agreement was concluded on 1 April 2007 after 10 months of negotiations. Under KORUS FTA, tariffs on nearly 95 per cent of trade in consumer and industrial products will be phased out within three years and it is estimated that it could expand trade between the two countries, which is already at US $79 billion a year, by as much as US $20 billion⁵.

The agreement has sparked resentment among communities in South Korea. On 1 April 2007, a taxi driver and member of the Korean Confederation of Trade Unions (KCTU) self-immolated in front of the Nam San Hyatt Hotel where the FTA negations took place, a symptom of the people’s frustration and their concern over the FTA’s impact in their future6.

Meanwhile, KoA has announced that although this “outcome is an affront to the common people of Korea…Our struggle, however, is not over. In the upcoming months KoA will use all means available to build our movement and stop the ratification” of KORUS FTA⁷.

 

¹ http://usinfo.state.gov/xarchives/display.html?
p=washfile-english&y=2007&m=June&x=20070630183604weolc0.6207849
² http://nofta.or.kr/en/entry/KoA-Newsletter
³ http://www.bilaterals.org/article.php3?id_article=8914
⁴ http://reuters.com/articlePrint?articleId=USN3028743420070630
⁵ http://www.bharattextile.com/newsitems/2004600
⁶ http://nofta.or.kr/en/69
⁷ http://nofta.or.kr/en/entry/KoA-Newsletter;