[Letter to the editor]FTA is indispensable, not optional

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[Letter to the editor]FTA is indispensable, not optional

A report on a study conducted by the Ministry of Commerce, Industry and Energy stated that unemployment levels will reach 100,000 in 10 years in Korea after a free trade agreement is signed between Korea and the United States. This part of the report is liable to be misunderstood.
Results of the research study by the government with experts from all walks of life show that signing a Korea-U.S. free trade agreement can create more than 550,000 new jobs. The study by the Ministry also reported an expected boost in job creation rather than a loss of jobs through the agreement. The reason why the negative aspects of signing the FTA were emphasized is that there could be structural reforms in some industries and damage to workers, which could cause a reduction of jobs in certain areas, even though the overall job creation will increase.
Moreover, the real damage would not be as severe as the report expected. In the research study, the complete liberalization of domestic markets was assumed immediately for the sake of convenience, but step-by-step liberalization is the general way in a real negotiation, and sensitive goods can be exempted from market openings. For instance, in the Korea-Chile trade agreement, the market phased out over five years, nine years and 16 years, including some exempted items for the opening of markets. In the Korea-U.S. FTA negotiation, both countries are considering step-by-step liberalization over three, five and 10 years, considering the degree of sensitivity of items, and some items will be exempted.
Because the government should prepare measures for every situation, the government has begun to make preparations by enacting the law on trade consulting and management support related to manufacturing industries last April. Hence, if there is any devastation to industries, the government is planning to immediately support damaged companies and workers through multiple support measures: financial support for stability of companies’ management and for the strengthening of competitiveness, support for changing jobs, and offering information and consulting for workers.
Countries all over the world have been integrating their economies through the competitive spread of free trade agreements. The FTA is indispensable to Korea, not optional. Last year, Korea became the 11th country to break the $300-billion mark in exports, and it’s because Korea enhances free trade by a steady open-market policy. The growth of local industries was a positive result of that because it enhanced Korean competitiveness. Korea continually maps out strategies for economic growth by opening of local markets, and FTAs will be in the center of those strategies.
Lee Seung-hoon, director, Trade and Investment Policy Office, Ministry of Commerce,
Industry and Energy
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