[Viewpoint] FTA traitors and patriots

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[Viewpoint] FTA traitors and patriots

South Koreans are being subjected to the Korea-U.S. free trade agreement test for the second time in four years. The key to its scoring is simple. If you say yes to the deal, you become a traitor to the country. If you say no, you become patriotic. Minister of Trade Kim Jong-hoon is being branded as the modern equivalent of Lee Wan-yong, the late Joseon Dynasty minister who sold off the country by signing the annexation treaty with Japan.

Democratic Party executive members who initiated the free trade pact with the U.S. four years ago - touting it as a launch pad for the country’s leap to prosperity - now say the very same trade deal is a leap onto the ash heap. Their dramatic volte-face defies economic reason and logic. Their political motivations are much easier to discern.

But the accusation that you become a traitor to your country if you support the deal does not stop at the trade minister. Average Koreans who have decided the deal will help the country economically fear being bundled into the “bad” category. The hot potato issue in the FTA debate has now boiled down to a highly technical mechanism called investor-state dispute settlement. Objections to ISD provisions now threaten to sink the deal.

Will the FTA with the U.S. jeopardize Korea’s economy? Is the clause allowing foreign investors to take business disputes to an international arbitration panel outside the Korean court system really that big a threat? Even I wasn’t that sure. We embraced a free trade pact with Chile because it meant we could drink Chilean wine for less money. But it is harder to disentangle the merit and demerits of a treaty with the U.S., which will create the world’s third-largest free trade zone.

So I sought advice from five economists and three international legal professionals.

Their opinions were generally the same. Korea is a trading country that relies on the markets beyond its seas. Its viability depends on its ability to reach the global market. Timing is important in everything. From the industrial and economic perspectives, now is the best time to strike a deal with the U.S. Korean companies must target niche industries that their American counterparts have given up on.

Koreans cannot afford to delay enlarging our global trade network. We are not a country that can survive on tradition and tourism. Instead of wrangling over specific terms of the trade deal, politicians should come up with measures to help the local industries that might face increased competition from U.S. products.

In the opinion of international law experts, what threatens our economic sovereignty is the World Trade Organization, not ISD provisions. A member country of the WTO must obey the trade body’s rules. That’s one matter. The ISD provisions is merely a protection for individual investors. It is a kind of investor’s bill of rights.

It is unreasonable to assume Americans will abuse a clause that also is included in trade agreements with the European Union and Japan. The idea that greedy Wall Street capital will gobble up our capital market and rip apart our public policies is simply childish and paranoid.

Many once feared that American retailers would wipe out our local stores. But Walmart has packed up and left the country after failing here, and Costco hasn’t gobbled up more than its share of business. American companies actually fear boycott campaigns by Koreans.

Experts have said the Korea-U.S. FTA will be a boon to the local economy, especially if it institutes strong measures to protect some industries. We cannot call them traitors. A total of 151 U.S. congressmen, or 35 percent of the members of the House of Representatives, have voted against the free trade deal with South Korea. They feared loss of American jobs to Korea’s manufacturing powerhouses. Eighty Korean legislators, or 25 percent of the assembly members, including a hardline 12 percent, oppose the FTA in fear of American inroads into the agriculture, livestock and service industries.

The U.S. came up with measures to deal with job losses as a result of the trade liberalization. Seoul must find similar solutions. If politicians really fear industrial colonization, they must come up with better ways for the country to live with China and Japan.

It would be a waste of ink to ask politicians to forget about next year’s parliamentary and presidential elections and consider the country’s best interests. But we must plead for some sense from politicians. The FTAs with the EU and U.S. will be like equipping the country with jet engines, allowing it to fly far ahead of regional powers like China, Japan and Russia. In the longer run, they will help the country build a nest egg for unification. We will get easier access to American and European capital and technology to rebuild North Korea.

Those are the arguments in favor of the FTA. The ones against are keeping the deal stuck in the National Assembly.

*The writer is a sociology professor at Seoul National University.


By Song Ho-keun
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