[Letter to the editor]Is Korea-U.S. FTA a Trojan horse?
In April after a year-long tug-of-war over the details, the South Korean government finally signed a free trade agreement with the United States. Theoretically, same believe that the FTA will boost South Korea’s sluggish economy by liberalizing and opening up local markets. However, the amendments made to the newly signed Korea-U.S. FTA to include new U.S. commercial policy made the citizens of South Korea truly perplexed about the fundamental purpose of this free trade agreement. Which one is it ― the promotion of free trade or fair trade on a regional basis?
The former is done by liberalization and opening up of local markets while the latter is usually done by making a more level playing field for global trade through standardized commercial rules such as anti-dumping and countervailing duties.
The problem lies in abuse by the United States of these commercial fair-trade policies. An example from recent years was conflict between South Korea and the U.S. over tariffs and price of D-RAM chips, which clearly showed the U.S. has been abusing these fair trade norms as an instrument to protect its comparatively disadvantaged or declining industries from the impact of liberalization. Under the pretext of fair trade, the world’s superpower has actually benefited from an aggressive pursuit of reciprocal trade. Along this line the U.S. now requires South Korea to incorporate its new commercial policy in their FTA. The policy, which includes environmental and labor norms-based trade restrictions, justifies and legitimizes the imposition of tariffs on products that degrade the environment and labor rights, consequently the quality of human life. In one sense, the U.S. position seems to some extent logical. However, this is nothing more than new protectionism. Put another way, this logic makes no sense because the new U.S. commercial policy itself can be abused in a way that is against fair trade norms.
Incorporating this policy in the Korea-U.S. FTA is not an appropriate method of pursuing environmental or labor values. No one can deny that the quality of human life is a value that people should try hard to protect through environmentalism.
However, environmental problems should be appropriately solved by environmental policy, while economic values could be ironed out only by economic policy. As the Nobel laureate Jan Tinbergen pointed out, every problem should be prescribed its proper solution. Otherwise, there will be side effects from governmental distortion.
These days, South Korea is driven into a corner by the cheap labor of China and the advanced technology of Japan. To overcome this economic crisis, also known as the “sandwiched” situation of Korea, an FTA with the United States seems an ideal solution. However, the negotiations by the officials of the South were more than disappointing.
Because the FTA is an important agreement that affects not only the economy but also its diplomacy, human rights and other areas of national life; there are high expectations for it as one of diverse approaches. As it turns out, the result is not as good as expected.
Although the negotiations between both parties had ended, the debate among the citizens over the justifications for an FTA is still on fire, resulting in a misunderstanding of the reality.
Put another way, many people still miss the important point. The question they should ask is not whether the Korea-U.S. FTA is justifiable, but whether it really is economic laissez-faire.
Park Min-ki, a student at Daewon Foreign Language High School