[VIEWPOINT]Industry can help farmers copeEven after six months of waiting, the National Assembly has failed to ratify the free trade agreement between Korea and Chile at the year-end session. The failure will bring further damage to our interests. Korea’s share of the Chilean market has already been damaged, and further delay might threaten the roots of the Korean economy, which is highly dependent on international trade and is already outside the mainstream of free trade networks.
According to the Chilean National Automobile Association, imports of Korean automobiles from January to August decreased by 18 percent compared to the same period in 2002. Korean cars used to have the second largest share in the industry after Japan, but now they have been reduced to fourth place.
Along with the weakened position in the Chilean market, the stalled agreement suggests how isolated we are in international trade. The deal with Chile was to be Korea’s official debut in the worldwide system of free trade.
In order to make progress in the free trade negotiations with Japan and Singapore and to pursue a similar deal with Mexico and the Association of South East Asian Nations, the free trade agreement with Chile is a prerequisite. But even if the Assembly finally acts, it might not solve all our problems. The government needs to pay extra attention to the shocks from free trade.
As a start, the government should consider why farmers so ardently protest the free trade agreement with Chile. Addressing the fundamental causes of opposition would be the basis of future economic planning. In fact, the free trade agreement with Chile excludes agricultural produces such as rice, apples and pears, the most sensitive items for Korean farmers. The government plans to provide over 1.2 trillion won ($1 billion) of subsidies to farm households over the next decade, and the aid package far exceeds the estimated damage to the farmers in that period. The opposition is more influenced by psychological revulsion over the government’s promotion of the trade pact.
In order to calm the angry farmers, the administration should immediately present the three pieces of special legislation supporting agriculture to the Assembly. It is crucial that the government recover the confidence of farmers. Instead of directly pouring in cash, it should diversify efforts to encourage the agricultural community to stand on its own two feet. The government should expand its investment in agricultural technology and nurture the biotechnology industry to promote systemic development of the rural regions.
Business also recognizes the value of the agricultural community, so industrial sectors will cooperate with farmers in efforts to overcome the shock waves from the free trade agreement.
We could start a campaign for each company to set up a sisterhood tie with a rural village. The movement would reinforce the relationship between urban and rural communities, and consumption of domestic agricultural produce could be boosted. The company could use the relationship to promote the health and welfare of its employees, and the rural village might make extra revenue from the interaction with a company. The involved companies might have to bypass the existing distribution systems and assume a certain cost to participate in the campaign. In that case, the government should offer an incentive package for the companies to encourage participation.
Four years has passed since Korea and Chile first met to negotiate a free trade agreement, and only Assembly ratification is left. We must prepare ourselves for the new order.
* The writer is the president of the Korea Chamber of Commerce & Industry. Translation by the JoongAng Daily staff.
by Park Yong-sung