Shortchanged on service

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Shortchanged on service

The free trade agreement between Korea and the United States included very little on opening the service sector. In such big talks, the government should have pushed this issue, but it lost a golden opportunity. Even President Roh Moo-hyun expressed his regret, saying that the education and medical markets were not opened at all and that the broadcasting and culture industry hardly opened either. He also said that legal and accounting sectors were only partially opened. It is no wonder that people are saying that the fields in which society’s vested interests have a stake did not open.
When the government initially sought an FTA with the United States, it pinned high hopes on the service sector. Its plan was to boldly open this sector, which is less competitive than the manufacturing industry, and use it as a new growth engine. It also intended to increase jobs.
During the past 15 years, 670,000 jobs were created in the manufacturing sector while 6.4 million jobs were created in the service sector. At least in the early stages of the talks, there were conflicts on whether or not foreign universities should be allowed to run businesses for profit when they establish a branch in Korea. But at some point, it was dropped from discussions, and in the end, the results are meager.
The United States has the strongest service sector in the world. We must be able to compete with the United States and survive in order to become the world’s best. And yet we are locking our doors rather than competing. The government said that it postponed the opening of education and medical sectors because of the public characteristics that those sectors have, but it is certain that [the government] has retreated from its initial position.
The two countries, with many perplexing issues at hand, saw the same political interest in burying medical and education-related discussions. Regarding the service sector, the government will not be able to avoid criticism that it was too defensive and lax in negotiations. As the opening of the service sector is put off, the economic effect of the Kor-U.S. FTA will also diminish. There are estimates that jobs that would be created by the Kor-U.S. FTA will fall from 5 million to 3 or 4 million, and production increase rates will drop from 7 percent down to 5 percent. Even if there were no Kor-U.S. FTA, there are severe problems in leaving the service sector as it is.
Last year, the deficits in service earnings and expenses amounted to $18.7 billion. The number of students going abroad to study exceeded 100,000, and they spent about $4.5 billion.
We hope the government will pick up where it left off in trying to open service markets, which include education and medical treatment. When it goes into FTA talks with other countries or the European Union, it must include opening the service market. Also, in order to reap the actual benefits from opening the market, it must boldly strip restrictions in order to stimulate competition in Korea. In order to strengthen competitiveness, there is no reason we shouldn’t allow companies that seek profits. Thailand has opened its medical market, and because it allows profit-making companies, more than 1 million foreign patients flock to the country every year.
The service sector must develop for Korea to become a developed country. The people’s discontent is similar, and we cannot forever maintain walls in the name of public interest.
The government must be prepared to defeat the opposition posed by vested rights such as the teachers’ union and medical groups. If it is unable to do that, people will continue to go abroad for study or to seek treatment for diseases.
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