Ratify the trade pact todayThe National Assembly is still dragging its feet on the ratification of a free trade deal with China. The plenary session of the legislature could not be held Thursday due to unbridgeable gaps between the ruling and opposition parties over supplementary measures for the FTA and other contentious issues. Though both parties agreed to narrow their differences, it’s still unclear if the Assembly can approve the pact so that it can take effect within this year.
FTAs don’t take effect immediately after their ratification, as it usually takes two months to finish administrative procedures. Even if Korea and China shorten the period as much as they can, it takes a month at minimum, including the time needed to revise and promulgate ordinances of related laws and determine an effective date. China also needs more than 35 days to receive an approval from the State Council and the Tariff Committee to promulgate revised laws. The Chinese government says it’s difficult to wrap up the process within 30 days even if it speeds up the ratification process. Given such circumstances, our plenary session today is the Maginot Line for the FTA to go into effect within this year.
The FTA should take effect within this year no matter what. The bilateral trade deal stipulates that both sides lower their tariffs immediately after it takes effect and once again on Jan. 1, 2016. In other words, if the deal takes effect within this year, Korea can enjoy the benefits of tariff reductions in quite a short span of time. When that happens, the government estimates that Korean companies could save $5.44 billion in tariffs.
There are many other reasons for the deal to take effect quickly. Korea’s exports have declined by two digits in the third quarter. Our economic vitality is rapidly diminishing, as seen in the first-ever reduction of total sales of local enterprises. A free trade deal with China, our biggest trading partner and the second-largest economy, can turn it around.
Both the ruling and opposition parties must take responsibility for the critical logjam. The opposition has been sitting on its hands, citing a need to subsidize the local agricultural and fisheries sectors and small and midsize companies. But it went too far when it called for an unheard-of system to share trade benefits with them and even cut utilities fees for farmers and fishers. The ruling party also couldn’t persuade its counterpart by simply reiterating the positive effects of the FTA.
Today’s plenary session is the last chance to change that. Both parties must ratify the trade deal today if they really care about the economy and citizens. JoongAng Ilbo, Nov. 27, Page 34