hankyoreh

three steps and one bow

By Hwang Joon-bum and Jung Eun-joo　

The United States government submitted the South Korea-U.S. Free Trade Agreement (KORUS FTA) to Congress on Monday. In response, the Lee Myung-bak administration and ruling Grand National Party (GNP) began scrambling to get South Korea’s FTA ratification bill through the National Assembly. The Democratic Party (DP), however, placed emphasis on its own “10 Plus 2 Bill,” insisting that renegotiations with the United States take place again. The bill’s passage is expected to be a difficult one.

“If the U.S. Congress passes the ratification bill, we have to pass it at around the same time,” said GNP floor leader Hwang Woo-yea. “When parliamentary audits [which end on Oct. 7] and interpellation sessions [Oct. 11-17] end, we must open a session of the Foreign Affairs, Trade and Unification Committee to pass the ratification bill.”

The KORUS FTA ratification bill was tabled before the committee on Sept. 16, 106 days after it was submitted to the National Assembly. It is currently pending before a Foreign Affairs, Trade and Unification Committee subcommittee.

“There can be no re-renegotiations as demanded by the opposition,” said Yoo Ki-june, a GNP assistant administrator on the committee. “Instead, we are thinking about accepting the parts of the 10 Plus 2 Bill that can be reflected in the form of domestic laws and systems.”

The GNP expects that if Congress passes the KORUS FTA ratification bill around the time of the South Korea-U.S. summit meeting on Oct. 13, pressure on the DP to pass the South Korean ratification bill will increase and demands for re-renegotiations will become meaningless.

DP floor leader Kim Jin-pyo, however, said, “The government must make a decision centered on 10 Plus 2 re-renegotiations and hold final negotiations with the U.S.”

The DP’s 10 Plus 2 Bill demands that 10 items to be renegotiated again, including a 10-year tariff waiver on beef, followed by yearly reductions of 8% from the 11th year and total abolition of 40% tariffs by the 15th year. It also includes demands for two supplementary South Korean policies in the form of a trade procedure law and an improved system of trade adjustment support.

The ratification bill submitted by the U.S. government to Congress contains elements that differ from the ratification currently being deliberated by the Korean National Assembly, prompting concerns over future controversy over the agreement’s validity after both states have completed their ratification procedures. Criticism has been made in particular that the agreement is unequal, as it includes content that is unilaterally disadvantageous to South Korea.

One common question is whether cases can be filed in the court of the partner nation. The U.S. ratification bill does not acknowledge the right of South Korean investors to sue the U.S. federal government, state governments or other U.S. citizens in U.S. courts.

The bill being considered by South Korea’s National Assembly, however, clearly states, “Investors have the right to choose to file cases in the courts of the partner country or according to international arbitration procedures.”

As a result, U.S. investors can sue the South Korean government and South Korean citizens, but South Korean citizens cannot do the same in the United States.

The status of the agreement according to domestic law in each state also shows differences. The U.S.’s ratification bill places federal and state laws above the KORUS FTA, so it differs greatly from the South Korean interpretation of the agreement that accords it status equal to or higher than that of domestic laws.

Only six laws in the United States are being amended because of the KORUS FTA, including those relating to certification of country of origin, tariffs, commission on the handling of commodities and government procurement. In South Korea, however, 24 laws are being amended. It appears that the statement of former top negotiator Kim Hyun-chong, that the KORUS FTA “transplants U.S.-style laws and systems,” is becoming a reality.

The United States has also made official its position that products from Kaesong Industrial Complex cannot be acknowledged as made in South Korea, exempted from tariffs and imported into the United States as long as the U.S.’s sanctions against North Korean remain in place, even if the KORUS FTA comes into effect.

Please direct questions or comments to [englishhani@hani.co.kr]